Tunisian fish-processing industries generates large amounts of by-products. Their disposal is an increasing environmental and health problem. For an economic utilization, these by-products may be used in producing higher value-added products such as protein hydrolyzates. In this study, protein hydrolyzates with different degrees of hydrolysis (12%, 20% and 26%) were prepared from heads and viscera of Sardinella aurita using crude protease of Bacillus licheniformis NH1. The obtained hydrolyzates containing 60% to 63% of proteins are tested as nitrogen or carbon sources for microbial growth and protease production. Results indicated higher level of protease activity for Bacillus cereus SV1 (5100 U/mL), Bacillus amyloliquefaciens An6 (2000 U/mL) and Pseudomonas aeruginosa MN7 (4200 U/mL). Interestingly, best protease production depends on the degree of hydrolysis (DH), justifying the use of different hydrolysis conditions. Sardinelle by-product hydrolyzates were also found to be good substrates for Escherichia coli and Saccharomyces cerevisiae growth. This approach can reduce environmental problems associated with fish waste disposal and, simultaneously, lower the cost of microbial growth and enzyme production.