The occurrence of a viable but nonculturable (VBNC) state in antibiotic-resistant E. coli (AR E. coli) and inefficient degradation of their antibiotic resistance genes (ARGs) may cause potential health risks during disinfection. Peracetic acid (PAA) is an alternative disinfectant for replacing chlorine-based oxidants in wastewater treatment, and the potential of PAA to induce a VBNC state in AR E. coli and to remove the transformation functionality of ARGs were investigated for the first time. Results show that PAA exhibits excellent performance in inactivating AR E. coli (over 7.0-logs) and persistently inhibiting its regeneration. After PAA disinfection, insignificant changes in the ratio of living to dead cells (∼4%) and the level of cell metabolism, indicating that AR E. coli were induced into VBNC states. Unexpectedly, PAA was found to induce AR E. coli into VBNC state by destroying the proteins containing reactive amino acids at thiol, thioether and imidazole groups, rather than the result of membrane damage, oxidative stress, lipid destruction and DNA disruption in the conventional disinfection processes. Moreover, the result of poor reactivity between PAA and plasmid strands and bases confirmed that PAA hardly reduced the abundance of ARGs and damaged the plasmid's integrity. Transformation assays and real environment validation indicated that PAA-treated AR E. coli could release large abundance of naked ARGs with high-efficiency transformation functionality (∼5.4 × 10–4 - ∼8.3 × 10–6) into the environment. This study has significant environmental implications for assessing the transmission of antimicrobial resistance during PAA disinfection.