In this study, isomerization conditions, cytotoxic activity, and stabilization of amygdalin from peach kernels were analyzed. Temperatures greater than 40 °C and pHs above 9.0 resulted in a quickly increasing isomer ratio (L-amygdalin/D-amygdalin). At acidic pHs, isomerization was significantly inhibited, even at high temperature. Ethanol inhibited isomerization; the isomer rate decreased with the ethanol concentration increasing. The growth-inhibitory effect on HepG2 cells of D-amygdalin was diminished as the isomer ratio increased, indicating that isomerization reduces the pharmacological activity of D-amygdalin. Extracting amygdalin from peach kernels by ultrasonic power at 432 W and 40 °C in 80% ethanol resulted in a 1.76% yield of amygdalin with a 0.04 isomer ratio. Hydrogel beads prepared by 2% sodium alginate successfully encapsulated the amygdalin, and its encapsulation efficiency and drug loading rate reached 85.93% and 19.21%, respectively. The thermal stability of amygdalin encapsulated in hydrogel beads was significantly improved and reached a slow-release effect in in vitro digestion. This study provides guidance for the processing and storage of amygdalin.