Protein hydrolysate from salted egg white (PHSEW) with different degrees of hydrolysis (DH) (3%, 6%, and 9%) was produced using pepsin. Disappearance of proteins with molecular weight (MW) of 108 and 85 kDa with the concomitant formation of proteins with MW of 23, 20, 13, and 5 kDa was observed in PHSEW. The use of PHSEW for quality improvement of Pacific white shrimp (Litopenaeus vannamei) was investigated. Shrimp soaked in 4% NaCl containing 7% PHSEW and 2.5% mixed phosphates (0.625% sodium acid pyrophosphate [SAPP] and 1.875% tetrasodium pyrophosphate [TSPP]) had the highest cooking yield with the lowest cooking loss (P < 0.05), compared with shrimps with other treatments. Nevertheless, no difference in weight gain was obtained in comparison with those treated with 4% NaCl containing 3.5% mixed phosphate (P > 0.05). Cooked shrimp treated with 4% NaCl containing 7% PHSEW and 2.5% mixed phosphate or those treated with 4% NaCl containing 3.5% mixed phosphate had the higher score of appearance, texture, and overall likeness but less shear force, in comparison with the control (no treatment) (P < 0.05). Microstructure study revealed that muscle fibers of cooked shrimp from both treatments had the swollen fibrils and gaps, while the control had the swollen compact structure. Therefore, use of PHSEW could reduce phosphate residue in shrimps without an adverse effect on sensory properties.