Degrees of hydrolysis by alkaline protease produced from Serratia marcescens S3-R1 is 3.95-6.30% of whey proteins during 5, 15, 30, 60, 90, 120,180, 240 min incubation at $40^{circ}C$. Proteolytic pattern of the whey proteins showed that various low molecular weight peptides were generated during the incubation periods. The biological function of in Raw 264.7 cells treated with whey protein hydrolytic peptides, anti-inflammatory effect showed exhibit in the expression of pro-inflammatory cytokines such as TNF-${alpha}$, IL-6, COX-2 and iNOS by PCR analysis. COX-2 and iNOS gene expression inhibited in Raw 264.7 cells on whey protein hydrolysates below 3,000 dalton. The protease from Serratia marcescens S3-R1 showed a potential in production of low molecular weight whey protein hydrolysates which could be used for industrial application.