Early detection and treatment are crucial for Alzheimer's disease (AD) management. Current diagnostic and therapeutic methods focus on late‐stage amyloid fibrils and plaques, overlooking toxic soluble amyloid β oligomers (AβOs) accumulating early in AD. A multifunctional liposome‐based platform is designed for early diagnosis and therapy of AD, leveraging a novel self‐assembled cyclic d,l‐α‐peptide (CP‐2) that selectively targets AβOs. Biocompatible CP‐2 conjugated liposomes (CP‐2‐LPs) effectively disrupt Aβ aggregation and mitigate Aβ‐mediated toxicity in human neuroblastoma cells. In transgenic Caenorhabditis elegans AD models, CP‐2‐LPs significantly outperformed free CP‐2 by improving cognitive and behavioral functions, extending lifespan, and reducing toxic AβO levels. Intravenous injection of fluorescently labeled CP‐2‐LPs reveals effective blood‐brain barrier penetration, with significantly higher brain fluorescence in transgenic mice than WT, enabling precise diagnosis. These findings underscore CP‐2‐LPs as a valuable tool for early detection and targeted therapy in AD.