This work presents investigations carried out to obtain by-products of bitter lupine (Lupinus albus), using a variety created specially in the Chilean Agricultural Research Institute (INIA). We present new information on obtaining protein isolates and hydrolysates as a way of adding value to bitter lupine, which promises to help return this crop to profitability in Chile. Lupine in this country is produced almost exclusively in the Araucanía Region, for the most part by small-scale farmers of the Mapuche ethnic group. An experimental design was drawn up based on one-factor experiments, for obtaining both protein isolate and protein hydrolysate. The best process conditions were achieved with stirring times of between 60 and 90 min; the concentrations (consistency of the mixture) were between 5 and 10%, with pH of the solution 12. The maximum yield achieved was 33% pure protein isolate (dry weight). After the protein isolates had been formulated, they were characterised by their functional properties: solubility, water retention capacity, lipid adsorption index, swelling capacity and foam stability. These properties are important for determining the quality of the protein hydrolysate, as they will affect its digestibility and thus its bioavailability in the organism. The protein hydrolysate was characterised by its complete proximal parameter, vitamins, total sugars, and amino acids. These results show that Lupinus albus (var. INIA-Boroa) is an excellent raw material for the existing functional foods industry.