Microbial communities inhabiting subsurface sediments contain abundant heterotrophs, which oxidize organic matter to obtain carbon and energy. Subsurface sediments contain very low concentrations of canonically bioavailable compounds, and it is not clear what fraction of sedimentary organic matter the community metabolizes. To gain a more mechanistic understanding of subsurface heterotrophy, we studied both the genetic potential encoded within metagenomes for extracellular peptidase production, and experimentally assayed the potential activities of a wide range of extracellular peptidases in sediments of the White Oak River estuary, NC. Deeply sequenced metagenomes revealed genes coding for at least 15 classes of extracellular peptidases. We observed enzyme-catalyzed hydrolysis of 11 different peptidase substrates in subsurface sediments. Potential activities (Vmax) of extracellular peptidases decreased downcore, but cell-specific Vmax was relatively constant and similar to values observed in seawater phytoplankton blooms. Decreases in half-saturation constants and relative increases in activities of D-phenylalanyl aminopeptidase and ornithyl aminopeptidase with depth indicate a community of heterotrophs that is adapted to access degraded organic matter. These results suggest a subsurface heterotrophic community that converts degraded organic matter into a bioavailable form, rather than a surface-adapted community relying on ever-decreasing concentrations of more labile organic matter.