Squid ink melanin can be efficiently extracted from the byproduct ink sac generated during squid processing. As a natural food colorant, it possesses inherent antioxidant properties and the capability to adsorb heavy metals. This study aims to investigate the solubility of water-soluble squid ink melanin (WSSM) obtained from the ink sac, as well as its stability under various conditions including temperature, pH, salt, sugar, potassium sorbate, metal ions, sodium benzoate, sodium sulfite (reducing agent), and hydrogen peroxide (oxidizing agent). Moreover, it explores the scavenging effects of WSSM on free radicals and cadmium ions. The findings suggest that WSSM's stability is insignificantly affected by high temperature, sucrose, and salt. However, acidity, sodium benzoate, potassium sorbate, sodium sulfite (NaSO), and hydrogen peroxide (HO) significantly influence its stability. Most metal ions do not impact the stability of WSSM, except for Fe, Fe, Al, and Cu, which result in the precipitation of WSSM. Additionally, WSSM exhibits remarkable antioxidant activity with IC values of 0.91, 0.56, and 0.52 mg/mL for scavenging superoxide anion radicals (O·), hydroxyl radicals (·OH), and DPPH radicals, respectively. It also demonstrates the ability to adsorb the heavy metal Cd, with the adsorption rate gradually increasing with a higher temperature and larger amounts of WSSM added. Infrared spectroscopy analysis reveals the weakening of characteristic peaks (-COOH and -OH) during the process of Cd adsorption by WSSM, while SEM confirms surface roughening and structural damage after Cd adsorption. This study provides valuable insights for the utilization of squid melanin products as natural antioxidants and heavy metal adsorbents in the food industry.