The sustainable valorization of infesting marine biomass offers opportunities to address environmental challenges and emerging nutritional needs. This study investigated the invasive red alga Gracilaria gracilis as a potential source of bioactive peptides with antihypertensive and antidiabetic properties. Protein hydrolyzates were generated via enzymatic digestion and fractionated by size exclusion chromatography. Peptidomics analysis using liquid chromatography coupled with high-resolution mass spectrometry identified 362 short-chain and 97 medium-chain peptides. Antioxidant effects were confirmed via diphenyl-2-picrylhydrazyl radical (DPPH), trolox equivalent antioxidant capacity (TEAC), and ferric reducing antioxidant power (FRAP) assays: at 20 mg/mL, short-chain peptides showed a TEAC of 60.8 ± 0.7% and a FRAP activity of 4638.7 ± 87.8%, significantly higher than the medium-chain fraction (36.1 ± 3.6% and 2180.6 ± 25.8%, respectively). Short-chain peptides also demonstrated stronger angiotensin-converting enzyme inhibition (19.53 ± 0.64% at 2.07 mg/mL) compared to medium-chain peptides (12.5 ± 0.42%). Conversely, medium-chain peptides exhibited superior dipeptidyl peptidase IV inhibition. Trans-epithelial transport experiments confirmed bioavailability, with 40 short peptides and 65 medium peptides detected in the basolateral compartment. These findings demonstrate the potential of converting invasive seaweeds into multifunctional ingredients for functional foods or nutraceuticals, supporting marine biotechnology and circular bioeconomy strategies for preventive healthcare and metabolic disease management.