The growing demand for sustainable proteins has highlighted cottonseed meal (CSM) as a promising high-protein byproduct. Addressing the challenge of valorizing the annual global production of over 10 million tons of CSM in cottonseed processing, this study investigated the use of choline chloride-ethylene glycol deep eutectic solvent (DES-4) for efficient protein extraction from CSM while reducing toxic gossypol content. Through Box-Behnken response surface optimization, we established optimal conditions (56 °C/3 h/40% water) that achieved 86.85% protein yield while remarkably reducing bound gossypol content from 10.24 mg/g to 2.76 mg/g. Molecular dynamics simulations (MDS) revealed that DES-4 enhance protein recovery and gossypol separation through synergistic mechanisms involving stabilizing solubility, relaxing matrix structure, and disrupting complexes. The obtained protein (CSMP-E) demonstrated superior solubility, emulsifying properties, and antioxidant activity compared to alkali-extracted counterparts. Furthermore, hydrolyzed DES-extracted protein (CSMP-EH) exhibited enhanced DPP-IV inhibitory activity (IC50 = 1.949 mg/mL), suggesting its potential for type 2 diabetes management.