To achieve the food-grade expression of bile salt hydrolase (BSH, EC 3.5.1.24) from Lactobacillus plantarum BBE7, the nisin controlled gene expression system (NICE), food-grade selection maker and signal peptide of Lactococcus lactis were used in this study. The open reading frame of BSH was optimized based on the codon bias of L. lactis, resulting in 12-fold and 9.5% increases in the intracellular and extracellular BSH activities, respectively. Three synthetic propeptides, LEISSTCDA (acidic), LGISSTCNA (neutral) and LKISSTCHA (basic) were also fused with signal peptide SPusp45 of vector pNZ8112 and introduced into the food-grade expression vector pNZ8149, respectively. Among these propeptides, acidic propeptide was effective in increasing the secretion efficiency and yield of BSH in recombinant bacteria, while neutral propeptide had no significant effect on the secretion of BSH. In contrast, basic propeptide strongly reduced the extracellular expression of BSH. By using codon optimization and the acidic propeptide together, the extracellular BSH activity was increased by 11.3%, reaching its maximum of 3.56 U/mg. To the best of our knowledge, this is the first report on the intracellular and extracellular expression of BSH using food-grade expression system, which would lay a solid foundation for large-scale production of BSH and other heterologous proteins in L. lactis.