Proteins are key ingredients in food processing that govern both nutritional and functional behavior of food systems. They are macromolecules composed of amino acids linked together by peptide bonds. Their macromolecular nature presents challenges like slower digestion and allergenic potential. Addressing these, protein hydrolysis has been explored to improve digestibility and reduce allergenicity, producing simpler, more absorbable hydrolysates. This research focuses on creating stable, functional protein hydrolysate powder from hen egg white, known for high-quality protein but limited by slow absorption rates (~3 g/h). Utilizing hydrodynamic cavitation (HC) as a pre-treatment to enhance hydrolysis, compared to traditional methods like ultrasound, we aimed to develop a viable instant protein supplement. HC pre-treatment improved the egg white proteins' functional, structural, and rheological properties, making it superior for hydrolysate production. Conditions tested included HC for 10, 15, and 20 minutes followed by papain enzyme hydrolysis. Optimal results were observed with 15-minute HC treatment, showing significant structural changes, increased hydrophobicity, and improved physicochemical and functional properties, including antioxidant activity and digestibility. The stability of egg white protein hydrolysates was tested using a desugarization process. However, the desugarization process did not have a significant impact on the stability of the egg white protein hydrolysate powder (EWPH). Thus, the protein hydrolysate powder was further studied by sorption isotherm analysis to understand the stability during storage and transport. EWPH obtained from two different drying methods namely freeze and vacuum drying, were assessed for their stability at elevated temperatures of 25, 35, 40, 45, and 55 °C. The study revealed that the HC treated freeze dried samples had the highest stability and functionality. An optimum storage temperature of 25 °C and relative humidity of 40% is suitable for maintaining the stability of EWPH powder. Overall, from the outcomes it can be suggested that the hydrodynamic cavitation technique provided a novel approach for developing stable egg white protein hydrolysate powder for producing nutrient-rich instant protein powder enriched with functional bioactive compounds and the process could be scaled up for large scale processing of protein powders.