Amyloid fibrils of tau are increasingly accepted as a cause of neuronal death and brain atrophy in Alzheimer's disease (AD). Diminishing tau aggregation is a promising strategy in the search for efficacious AD therapeutics. Previously, our laboratory designed a six-residue, nonnatural amino acid inhibitor D-TLKIVW peptide (6-DP), which can prevent tau aggregation in vitro. However, it cannot block cell-to-cell transmission of tau aggregation. Here, we find D-TLKIVWC (7-DP), a d-cysteine extension of 6-DP, not only prevents tau aggregation but also fragments tau fibrils extracted from AD brains to neutralize their seeding ability and protect neuronal cells from tau-induced toxicity. To facilitate the transport of 7-DP across the blood-brain barrier, we conjugated it to magnetic nanoparticles (MNPs). The MNPs-DP complex retains the inhibition and fragmentation properties of 7-DP alone. Ten weeks of MNPs-DP treatment appear to reverse neurological deficits in the PS19 mouse model of AD. This work offers a direction for development of therapies to target tau fibrils.