Cancer-specific diagnosis is challenging. Phage display is an approach that could contribute to finding new specific biomarkers. In this study, we developed a new peptide probe specific for gastric cancer and validated it for gastric cancer-specific theranostics. We isolated linear peptides by screening a combinatorial phage library for a cancer stem cell marker, LGR5 protein. Among these, peptides with high selectivity against gastric cancer cells were selected and examined for therapeutic poteintial in vitro as well as in vivo. Through leucine-rich G protein-coupled receptor 5 (LGR5) protein-based phage display, we obtained a hydrophilic 7-mer peptide sequence (STCTRSR, named STC). Both the STC-peptide-conjugated fluorescent dye and chlorin e6 (Ce6) displayed a significantly higher intensity in gastric cancer cells compared to that in healthy cells. In mice with gastric cancer, the fluorescence in the tumors was 3.4× more intense when treated with the Ce6-STC conjugate compared to that with free Ce6 and conferred higher phototoxicity after single laser irradiation. Repeated photodynamic therapy could further reduce the tumor volume after treating these mice with the Ce6-STC conjugate. The treatment with the Ce6-STC conjugate exhibited a significantly lower fluorescence in the liver than that with free Ce6. In conclusion, we confirmed that the STC peptide is a gastric cancer-specific probe that could be useful in gastric cancer theranostics. In conclusion, considering its targeting ability and hydrophilicity, various hydrophobic chemotherapeutic agents could be revisited for gastric cancer treatment in combination with the probe described in this study.