Tea dregs possess abundant proteins, and the objective of this study was to investigate the antioxidant activity of tea dregs protein hydrolysate with limited hydrolysis by protamex and its possible action mechanism. Tea dregs protein was hydrolysed by alcalase, protamex or neutrase. The hydrolysis condition was optimised, and the hydrolysate was characterised for 1,1-diphenyl-2-picryl hydrazyl (DPPH) radical-scavenging activity, hydroxyl radical-scavenging activity and antioxidant activity in linoleic acid (LA) system and in chicken products. Tea dregs protein hydrolysate (TDPH) was formulated (0.1%, 0.5%, 1.0%, w/w) into chicken products to determine in situ antioxidant efficacy. Thiobarbituric acid-reactive substances (TBARS) and peroxide value (POV) formed in chicken products during storage (4 °C, 0–7 days) were analysed. Results showed that the optimum hydrolysis condition was at 50 °C, pH 7.0 for 20 min, and the concentration of tea dregs protein was 1.5%; ratio of protamex to substrate was 6000 U g−1. The radical-scavenging ratio of TDPH to 1,1-diphenyl-2-picryl hydrazyl (DPPH) was 90.30% at the concentration of 0.1 mg mL−1 and that to hydroxyl radical was 65.18% at the concentration of 1.0 mg mL−1. Moreover, it also showed strong antioxidant activity both in linoleic acid (LA) system and in chicken products. The molecular weight distribution of tea dregs hydrolysates was determined by nanofiltration tubular membrane, and the protein hydrolysates with molecular weight above 8000 Da had more effective antioxidant activity. The radical-scavenging activities to DPPH and hydroxyl radical were 85.72% at 0.1 mg mL−1 and 71.52% at 1.0 mg mL−1, respectively. These findings suggest that the enzymatic hydrolysate of tea dregs protein probably possesses the specific peptides/amino acids which could stabilise or terminate the radicals through donating hydrogen. In addition, the hydrolysate could form a physical barrier around the fat droplets.