The effects of gamma-irradiation on the microbial growth, phenolic composition, and antioxidant properties of peanut skin were evaluated. Gamma-irradiation at 5.0 kGy decreased the microbiological count of the product. Total phenolic and proanthocyanidin contents, ABTS radical cation, DPPH radical, H2O2, and hydroxyl radical scavenging capacities as well as the reducing power of the sample were increased upon gamma-irradiation in both the free and insoluble-bound phenolic fractions. However, a decrease in the esterified phenolics was noticed. The bioactivity of the free phenolics against in vitro human LDL-cholesterol oxidation and copper induced DNA strand breakage was improved upon gamma-irradiation. Phenolic acids, flavonoids, and proanthocyanidins were positively or tentatively identified by HPLC-DAD-ESI-MSn and their distribution was in the decreasing order of free > esterified > insoluble-bound forms. Procyanidin dimer A was increased in all phenolic fractions, whereas procyanidin dimer B decreased. Gamma-irradiation induced changes may be explained by molecular conversion, depolymerization, and cross-linking.