A strict and lifelong dietary intake control of low-phenylalanine (Phe) foods is an important therapy method for the patients with Phe hydroxylase deficiency. As an excellent protein source, casein has been used to prepare low-Phe polypeptides for the potential development of low-Phe foods. However, casein has not been explored as the protein source to prepare low-Phe polypeptides. This work aimed to develop casein polypeptides (CPs) and low-Phe CPs (LCPs) from milk protein casein using a combination method of two-step (alkaline protease and then flavourzyme) enzymatic hydrolysis with activated carbon adsorption. The preparation of the LCPs was dependent on several key parameters such as enzyme/casein mass ratios, enzymatic hydrolysis time, adsorption pH, adsorption temperature, activated carbon addition amounts, and adsorption time. The LCPs showed similar attenuated total reflection Fourier-transform infrared spectra and secondary structure percentages to the CP. The LCPs had lower molecular weights (1121–4726 Da vs. 10–38 kDa) and Phe contents (3.31%–1.35% vs. 4.56%) compared with casein. The LCPs had better fat-binding ability (3.15–1.21 g/g), lower emulsifying activity ability (0.25–0.21 vs. 0.98 m²/g), higher emulsifying stability ability (16.70–24.44 vs. 11.78 min), higher 2,2-diphenyl-1-picrylhydrazyl free radical scavenging capacity (38.62%–41.06% vs. 36.59%), higher reducing capacity (0.011–0.013 vs. 0.007), and lower Fe²⁺-chelating ability (19.61%–17.65% vs. 41.18%) than CPs. They suggested aromatic amino acid-related CP fragments had different properties to other CP fragments. All the results confirmed low-Phe polypeptides could be prepared from casein via the combination method of two-step (alkaline protease and then flavourzyme) enzymatic hydrolysis with activated carbon adsorption. The work provided a useful method to prepare low-Phe polypeptides from milk protein casein for the development of low-Phe foods. It also provided useful information to understand the structure and function of hydrolyzed polypeptides and amino acid-deficiency polypeptides.