Heat-denatured soy protein was hydrolyzed by Alcalase to 2.0% or 4.0% degree of hydrolysis (DH), heated again at 100°C and deamidated with B. circulans peptidoglutaminase. The extent of deamidation was 6.0% and 8.2% for 2.0 DH hydrolysates and 12.8% and 16.0% for 4.0 DH hydrolysates heated for 15 and 30 min, respectively. Deamidation increased protein solubility and substantially enhanced emulsifying activity under mildly acidic (pH 4–6) as well as alkaline conditions. Deamidation improved emulsion stability and foaming power of heat-denatured hydrolysed soy proteins. Enzymatically deamidated soy protein hydrolysates had improved functional properties compared to nondeamidated hydrolysates and the native soy protein.