The growing demand for functional foods has driven the search for bioactive compounds derived from plant proteins. Lupinus mutabilis “Tarwi”, a legume native to the Peruvian Andes, stands out for its high protein content and potential as a source of bioactive peptides (BPs). In this study, the functionality of the proteins contained in the albumin fraction (AF) isolated by tangential ultrafiltration (TFF) was investigated by using the OmicsBox software. The identified proteins were functionally classified into three groups: cellular component (35.57%), molecular function (33.45%), and biological process (30.97%). The isolated AF was hydrolysed with the native protease PC7 (HAP), optimizing the E/S ratio and time parameters. Additionally, sequential hydrolysis of the PC7 protease and alcalase (HAPA) was performed. In vitro multifunctionality assays, HAP and HAPA demonstrated the ability to scavenge radicals (ABTS and ORAC) and inhibit angiotensin-converting enzyme (ACE)-I and dipeptidyl peptidase IV (DPP-IV). The findings of this study highlight the potential of L. mutabilis albumin hydrolysate as a multifunctional ingredient for functional foods aimed at managing chronic conditions associated with oxidative stress, hypertension, and/or metabolic disorders.