Phycoerythrin (PE) is a natural protein–pigment complex with a strong pink color, but it is sensitive to thermal and light variations. In this study, PE was extracted fromPorphyra haitanensisin a yield of 0.2% (w/w). The phycoerythrin hydrolysates (PEH) (3–10 kDa) were prepared by enzymatic hydrolysis of PE with bromelain (8000 U/g) at 47 °C for 30 min, with a degree of hydrolysis (DH) of 11.57 ± 0.39% and a color degradation rate of 7.98 ± 0.39%. The physicochemical properties of PEH were evaluated. The UV and fluorescence spectra indicated that bromelain changed the microenvironment around phycoerythrobilin (PEB). The infrared spectrum revealed that the bromelain hydrolysis increased theα-helix content of PEH. The scanning electron microscope showed that bromelain destroyed the dense and smooth structure of PE, resulting in irregular porous structures. The radical scavenging activities of DPPH and ABTS of PEH were increased relative to that of PE (p< 0.05). The thermal (50–80 °C)-, UV (0.5–3 h)-, visible light irradiation (2–8 h)-, and metal ion exposing stabilities of PEH were significantly improved (p< 0.05). This study provides a potential scheme for overcoming the sensitivity of PE to thermal and light variations and facilitates PEH as a natural colorant ingredient in food and pigment applications.