Cyanobacteria are an immense source of innovative classes of pharmacologically active compounds exhibiting various biological activities ranging from antioxidants, antibiotics, anticancer, anti-inflammatory to anti-Alzheimer's disease. In the present study, we primarily targeted the inhibition of Beta-site amyloid precursor protein cleaving enzyme-1 (BACE1) by a naturally occurring cyanobacterial protein phycoerythrin (C-PE). BACE1 cleaves amyloid-β precursor protein (APP) and leads to accumulation of neurotoxic amyloid beta (Aβ) plaques in the brain, as an attribute of Alzheimer's disease (AD). Inhibition of BACE1 was measured in terms of their association and dissociation rate constants, thermodynamics of binding using surface plasmon resonance (SPR) and isothermal titration calorimetry (ITC). The kinetic parameters for enzyme activity were also measured using synthetic decapeptide as a substrate. We further validated the potential of PE by in-vivo histopathological staining of Aβ aggregate mutant Caenorhabditis elegans CL4176 by Thioflavin-T. The present studies pave the way for the application of naturally occurring C-PE as a putative therapeutic drug for the AD.