Fish protein hydrolysates (FPH) have gained increasing attention as nutritious fish products. Lipid oxidation associated with fishy odor in FPH limits its utility. Thus, an appropriate pretreatment of fish mince prior to hydrolysis by lowering pro-oxidants and lipid substrates could tackle such a problem. Different pretreatments of Nile tilapia minces including (1) washing (W), (2) washing and membrane removal (W-MR), and (3) washing/membrane removal followed by acid or alkaline solubilization (W-MR-Ac or W-MR-Al) were conducted prior to hydrolysis. During the hydrolysis process, degree of hydrolysis (DH) and chemical changes were monitored. Color and sensory properties of milk fortified with hydrolysates prepared from mince without and with pretreatment were also determined. Among the pretreated mince samples, W-MR-Al contained the lowest remaining myoglobin and heme iron contents and also showed the lowest total lipid and phospholipid contents (P < 0.05). When mince and W-MR-Al were hydrolyzed using Alcalase for up to 120 min, higher DH were found in W-MR-Al. Furthermore, lower peroxide values, thiobarbituric acid reactive substances, and non-heme iron contents of hydrolysates from W-MR-Al were also observed (P < 0.05). When FPH powder from mince and W-MR-Al (0.3% to 0.5%) were fortified in milk, the former yielded a lower likeness score (P < 0.05) at all levels used. The addition of the latter up to 0.5% had no effect on likeness of all attributes, compared with control (without FPH). An appropriate pretreatment of mince was a promising approach to lower fishy odor problem, caused by lipid oxidation in FPH.