Screening of the strains for solid-state aerobic fermentation of the residue from wheat alcohol progressing and the antioxidant activity of small peptide from the fermentation were studied. Using Bacillus licheniformis D-1and Bacillus subtilis KG109 as strains to ferment and compare with koji used by the company at present,the amount of inoculum and levels of moisture content were tested. The result with higher moisture and more small peptides was optimum combination. Then DPPH scavenging activity,hydroxyl radical scavenging activity and the total reducing capacity of its small peptides were measured. The results showed that D-1 was the best when inoculums was 3% and moisture content was 70%,and the content of acid soluble proteins and crude proteins in the product were both significantly higher than those in the control( P < 0. 01). Five peptides with 8,7,5,4 and 3 amino acids respectively were separated from the acid soluble proteins. The other four peptides all had DPPH radical scavenging activity and hydroxyl radical scavenging activity except peptide with 8 amino acid residues,and the total reducing capacity of 5 mg /mL of peptide with 4 acid residues was equivalent to 0. 5 mg /mL glutathione. These results implied that D-1 was an efficient strain to improve the forage quality of the residue from wheat alcohol progressing and most of small peptides had strong antioxidant activity.