Abstract Ethanol-induced gastric mucosal injury (AGMI) is intrinsically linked to oxidative stress, inflammatory responses, and compromised mucosal defense. This study aimed to isolate bioactive peptides from yeast protein (YP) and elucidate these in vitro protective mechanisms against AGMI. Activity-guided multi-technique separation, nanoLC-MS/MS, and bioinformatic screening were used to identify two novel peptides, ISPALLDKL and TAADLRYF. In ethanol-injured GES-1 cells, these peptides (240 and 320 μg/mL) exhibited potent cytoprotective activity comparable to omeprazole. Peptide pre-treatment attenuated reactive oxygen species (from 31.79 to 9.52 and 10.02), restored mitochondrial membrane potential (ΔΨm increased from 0.5 to 2.78 and 2.11), and reduced apoptosis (from 28.55 to 10.52% and 12.58%). Furthermore, these peptides associated with the suppression of pro-inflammatory cytokines, decreasing TNF-α (24.9 and 21.9%), IL-1β (30.1 and 26.3%), and IL-6 (41.9 and 37.6%), while markedly enhancing the anti-inflammatory cytokine IL-10 (110.8 and 91.0%), respectively; these effects were accompanied by inhibition of NF-κB and JAK2–STAT3 phosphorylation. Collectively, ISPALLDKL and TAADLRYF protect against ethanol-induced gastric epithelial cell injury by simultaneously modulating oxidative stress, apoptosis, and inflammation, positioning them as promising natural candidates for gastric mucosal protection.