The effect of various protease and carbohydrase treatments on the extraction of polyphenols and other antioxidant ingredients from the red algae Palmaria palmata (dulse) was investigated. In addition, the relative contribution of different fractions to the overall antioxidant capacity of the hydrolysate was evaluated. Considerable differences were observed both in total phenolic content (TPC) and antioxidant activities of the hydrolysates evaluated using 2,2-diphenyl-1-picrylhydrazyl (DPPH) radical scavenging activity, oxygen radical absorbance capacity (ORAC) and ferrous ion-chelating ability assays. All the proteases tested had significant enhancing effect on the extraction of polyphenols and other active components compared to carbohydrases and cold water extraction (control). The Umamizyme extract had the highest TPC and consequently exhibited the strongest scavenging capacity against DPPH and peroxyl radicals. Further fractionation of the Umamizyme extract revealed that the crude polyphenol fraction possessed the highest peroxyl radical scavenging activity, whereas the crude polysaccharide fraction was more effective for chelating ferrous ions. The data from this study suggest the potential of protease treatment to improve value-added utilization of dulse extracts as antioxidants in functional foods and nutraceuticals.