Soybean varieties of Sikkim Himalayan region used for Kinema preparation were fermented using two different protease producing Bacillus subtilis strains, B. subtilis MTCC5480 and B. subtilis MTCC1747. Fermentation of soybean increased radical (DPPH and superoxide) scavenging activity (3.1–24 folds), total antioxidant activity and reducing power in the aqueous extracts in comparison with unfermented soybean. This was supported by higher degree of protein hydrolysis (TCA soluble protein by Kjeldahl method), increase in free phenolics and free amino acid contents (proline, tryptophan, tyrosine, phenylalanine, and histidine) on hydrolysis. Change in antioxidant activity on gastrointestinal digestion of fermented soybean depended on the strains used for fermentation, showing specificity of the peptides formed during fermentation. Soybean fermented with potential proteolytic Bacillus subtilis strains enhanced antioxidant properties due to increase in peptides as well as polyphenols. By-products resulting from soybean processing also showed reasonably good antioxidant properties for their application as food/feed additive.