This study aimed to enhance the added value of protein from by-products of the purified starch industry (BPSI). Proteins from BPSI were extracted with 0–660 UI α-amylase before being hydrolyzed by neutrase from 0 to 175 UI for 0–150 min at 80 ◦C, pH 5.3. The results showed that with 264 UI of α-amylase treatment for 60 min, the extraction of proteins improved the content of protein recovery up to 87.1%. The kinetic parameters of neutrase were Vmax = 0.8982 μMol tyrosine/min and Km = 0.9103%. The most effective condition for neutrase hydrolysis was 150 UI, 120 min, and 20% protein concentration. The highest hydrolysis efficiency reached 16%. The recovered protein has few free amino acids compared with those in the hydrolysates. The protein hydrolysate (PH) showed high foam forming and stabilizing properties for 30 min compared with those of the natural protein recovered. Furthermore, the PH exhibited heat resistance and protease inhibition properties. Thus, the purity and natural state of PH extracted by α-amylase could be improved. Foam formation and stabilization together with heat resistance and proteinase K inhibition exhibited by the PH indicate the potential application of this in the rice beer industry.