Naringin is a flavanone glycoside in citrus fruits that has various biological functions. However, its bitterness affects the quality, economic value, and consumer acceptability of citrus products. Deglycosylation of naringin using naringinase decreases its bitterness and enhances its functional properties. In this study, eight microbial strains with naringinase activity were isolated from 33 yuzu-based fermented foods. Among them, naringinase from Aspergillus oryzae NYO-2, having the highest activity, was used to produce prunin and naringenin. Under optimal conditions, 19 mM naringin was converted to 14.06 mM prunin and 1.97 mM naringenin. The bitterness of prunin and naringenin was significantly decreased compared to naringin using the human bitter taste receptor TAS2R39. The neuroprotective effects of prunin and naringenin on human neuroblastoma SH-SY5Y cells treated with scopolamine were greater than that of naringin. These findings can widen the potential applications of deglycosylation of naringin to improve sensory and functional properties.