Soy proteins are very important protein source for human being and livestock. Enzymatic hydrolysis of soy protein can enhance or reduce its functional properties and improve its nutritious value. Soy protein hydrolysates were primarily used as functional food ingredients, flavour and nutritious enhancers, protein substitute, and clinical products. Conditions for hydrolysis were usually mild, whereas recently high pressure treatment attracted more interest. Degree of hydrolysis (DH) was usually between 1% and 39.5%. The main problem associated with proteolytic hydrolysis of soy protein was production of bitter taste, hydrolysates coagulation and high cost of enzymes. Bitterness reduction can be achieved by control of DH, selective separation of bitter peptides from hydrolysates, treatment of hydrolysates with exo-peptidases, addition of various components [adenosine monophosphate (AMP), some amino acids, monosodium glutamate (MSG), etc.] to block or mask the bitter taste, and modification of taste signalling. Hydrolysates coagulation can be resolved by selecting appropriate enzymes and by applying immobilisation technology the production cost can be reduced. Enzymatic hydrolysis also enhances bioactivity of soy proteins through conversion of glycosides to aglycones, increasing antioxidant and immunoregulatory properties. Finally, future works have been discussed.