Milk allergy is one of the most common food allergies, affecting 6% of young children, and β-lactoglobulin (β-LG) is the main milk allergen. Clostridium tyrobutyricum Z816 was selected for the degradation of β-LG, which was successfully reduced by about 90% using permeabilized bacteria under the optimized conditions. The hydrolyzed peptides were identified by liquid chromatography-tandem mass spectrometry (LC-MS/MS) and analyzed by molecular modeling, which indicated that C. tyrobutyricum Z816 could effectively degrade the antigenic epitopes of β-LG. Finally, the concentration and digestibility of β-LG in actual samples was quantified using enzyme-linked immunosorbent assay (ELISA) and gastrointestinal digestion simulation experiments. The results showed more than 92% of β-LG in actual samples was hydrolyzed, and the gastric and total digestibility of whey protein isolate (WPI) was improved by 85.96% and 64.51%, respectively. Therefore, C. tyrobutyricum Z816 offers an effective method to degrade β-LG and reduce the occurrence of milk allergies, which has great significance for the development of hypoallergenic dairy products.