Alzheimer’s disease(AD) is a neurodegenerative disorder characterized by the deposition of β-amyloid peptide(Aβ) in the brain tissues, and an imbalance in the oxidant-antioxidant system. Compounds with antioxidant activity and the ability to inhibit Aβ aggregation therefore potentially treat AD. In this study, we designed an iron-porphyrin containing bifunctional peptide(BP, Deuterohemin-AlaHisThrValGluLysLeuProPhePheAsp) based on natural microperoxidase-11(MP-11) and typical β-sheet breaker LPFFD(iAβ5p). This BP substantially reduced the aggregation of Aβ and caused oligomer disassembly, by binding Aβ with affinity constant of 9.07 μmol/L. Furthermore, it showed a neuroprotective effect on Aβ25—35 induced toxicity in SH-SY5Y cells, and significantly alleviated Aβ-induced paralysis and extended lifespan in Aβ1—42 transgenic C. elegans(CL4176). It also showed a potent peroxidase activity of 20.8 U/mg, and scavenged free radicals both in vitro and in vivo. In addition, BP up-regulated the levels of hsp16.2, hsp16.41, and hsp12.6 mRNAs to 183.26%, 160.16%, and 162.64% respectively, and down-regulated that of hsp70 to 36.76% in C. elegans. Taken together, the synthetic BP inhibited Aβ aggregation and showed antioxidant activity, indicating the therapeutic potential of novel peptide drugs against AD.