This study investigated the bitterness, structure, physicochemical properties and functional properties of peanut protein hydrolysate (PPH) debittered using β-CD and 2-butanol. The sensory properties of debittered PPH were characterized using sensory evaluation combined with electronic tongue and colorimetric analysis. High-performance size exclusion chromatography (HPSEC) and Fourier transform infrared (FTIR) spectroscopy characterized the structures of debittered PPH. Surface hydrophobicity, components of amino acids, and DPPH and ABTS radical scavenging capacities characterized the functional and physicochemical properties of debittered PPH. Bitterness of PPHF-4 with combined treatment of β-CD and 2-butanol was negligible with bitterness score (0.24) and almost unchanged color. Moreover, PPHF-4 retained a high level of umami with the electronic tongue umami response value (12.95). Surface hydrophobicity and amino acid analyses showed that PPHF-4 had the lowest surface hydrophobicity (8.36) and hydrophobic amino acids (202.62?mg/g) content among PPHs debittered. HPSEC analysis showed that compared to untreated PPH, protein hydrolysates less than 5.57?kDa in PPHF-4 were obviously reduced and less than 1.68?kDa were completely removed. The DPPH and ABTS radical scavenging IC50 of PPHF-4 was 0.67 and 0.40?mg/mL, which was decreased but still had a high level of antioxidant properties compared to PPH (0.44 and 0.34?mg/mL).