The direct addition of health-promoting peptides to food products is limited due to their physicochemical instability and bitter taste, as well as, their bio-functionality may be influenced by MW. In this study, SPI hydrolysate (SPIH) was Alcalase-prepared, size-fractionated (<10, 10-30 and 30-100 kD), and the amino acid composition of peptide fractions determined. The physicochemical properties, morphology and antioxidant stability of the fractions were also investigated after spray-drying encapsulation in maltodextrin-WPC carrier. The two low MW peptide factions (esp., PF<10) were more active than intact SPI, SPIH and high MW peptide fraction in scavenging free radicals and chelating transition metal ions. As compared to the particles containing SPIH, those containing the smallest peptide fraction (PF<10) had higher solubility and hygroscopicity, lower production yield and wettability, and more wrinkles, indentations and surface roughness. The highest antioxidant stability during spray-drying was observed for the two low MW peptide factions, which examined by scavenging of free radicals of DPPH (88%), ABTS (97%), OH (93%) and NO (80%), chelating of iron (88%) and copper (87-90%) ions, reducing power (93%) and total antioxidant activity (90%). This finding reflects more structural and biological stability of the low MW factions to shear stress and dehydration during spray-drying, as compared with SPIH. The spray-drying encapsulated soy peptide fractions may be used as nutraceuticals for development of functional foods.