Cordyceps militaris is rich in protein, polysaccharide, cordycepin and other active components, with anti-cancer and anti-oxidation functions. In order to improve the economic value of Cordyceps militaris, the protein was extracted from its fruiting body by alkali solution and acid precipitation method, and the extraction conditions were optimized by orthogonal test. The polypeptide was obtained by digesting those protein with protein complex enzyme. And the antimicrobial and anticancer activities of those polypeptides were evaluated by measuring inhibitory zone and cytotoxicity. The results showed that the optimal extraction conditions of protein were as follows: pH 8.5, solid-liquid ratio 1:28, extraction time 210 min, extraction three times, the highest protein yield was 45.06%. The optimum enzymatic hydrolysis process of Cordyceps militaris polypeptide solution was as follows: the ratio of alkaline protease to papain was 4:3; The optimum temperature of enzymolysis was 55℃, pH 7.2, the enzyme dosage was 7000 U/mL, the enzymolysis time was 210 min, and the highest yield of peptide was 16.73%. Under these conditions, the polypeptides prepared from Cordyceps militaris (< 3.0×103 Da) showed good antibacterial activity against Escherichia coli, Bacillus subtilis and Staphylococcus aureus, with inhibitory zones of (12.08 ± 0.22), (6.67 ± 0.12) and (10.32 ± 0.23) mm, respectively. The results showed that the SAO-S (IC50 = 0.49 mg/L) and T24 (IC50 = 0.23 mg/L) were significantly inhibited by Cordyceps militaris polypeptide.