Abstract Background Probiotic bacteria can provide health benefits when delivered in functional foods. This study involved isolation of lactic acid bacteria (LAB) from traditionally dried and salted anchovy fish and characterization of their survival in simulated gastrointestinal digestion. Promising strains were used to prepare fermented fish sausages which were then evaluated for cytotoxicity activity against two cancer cell-lines, antidiabetic activity as determined by α-amylase and α-glucosidase inhibition, and antioxidant and proteolytic activities in vitro, as compared to non-fermented control sausages. Results Out of 85 LAB obtained, 13 isolates with high tolerance to simulated gastrointestinal digestion were obtained, which were identified as Enterococcus spp. Four E. faecium strains, one E. faecalis, and one E. durans were used separately to make fermented fish sausages. The α-amylase and α-glucosidase inhibition from fish sausages fermented by Enterococcus spp. ranged from 29.2 to 68.7% and 23.9 to 41.4%, respectively, during 21 days of storage. The cytotoxicity activities against Caco₂ and MCF-7 cells of fish sausages fermented with Enterococcus spp. ranged from 18.0 to 24% and 13.9 to 27.9%, respectively. Cytotoxicity activities correlated positively with proteolysis and antioxidant activities, α-amylase and α-glucosidase inhibition activities, but negatively with the pH in fermented fish sausages. Strains also exhibited antimicrobial activity against foodborne pathogens and presented no significant concerns with regards to antibiotic resistance or virulence gene content. Conclusions Fish sausages fermented by potential probiotic isolates of Enterococcus spp. from dried fish had valuable health-promoting benefits compared with non-fermented control sausages.