Background: Lupin seeds are rich in proteins, which are utilized in the food industry. There is an increased interest in lupin research due to its association with health-related benefits, such as reduction of hypertension and hyperglycemia. However, studies on the peptides derived from lupin proteins are rare. Results: Lupin protein hydrolysates (LPHs) were prepared by proteolysis using alcalase, trypsin and pepsin, respectively. All the hydrolysates demonstrated higher antioxidant and angiotensin I-converting enzyme (ACE) inhibitory activities compared to lupin proteins. The hydrolysates were fractionated into three fractions based on molecular weight (MW), and the peptides with MW < 3 kDa (LPH3) had the highest antioxidant and ACE inhibitory activities compared to other fractions. Cell model study revealed that LPH3 fraction had the highest protection against the generation of reactive oxygen species in HepG2 cells, which was associated with increased activities of superoxide dismutase and glutathione peroxidase through upregulation of SOD1, GPX1, GCLM, SLC7A11 and SRXN1 expression. Conclusions: The analysis of amino acid composition indicated that the peptides were characterized with high content of hydrophobic amino acids, which may be responsible for the greatest antioxidant activity. This study highlights the promising potential of lupin peptides as a functional ingredient in healthy foods.