In this study controllable hydrolysis of Lentinus edodes with alkaline protease was performed to obtain peptides for subsequent application as an active ingredient in milk beverage. The formulation for the novel beverage was optimized based on sensory evaluation and stability using combination of one-factor-at-a-time method and orthogonal array design. The optimum proportions by weight of ingredients in the beverage were 2.0% Lentinus edodes-derived peptide, 1% milk powder, 10% white sugar, and 0.20% citric acid. The optimized formulation had a fine and smooth taste, good flavor and high stability.