Background: Previously, a novel lamprey immune protein (LIP) was identified, which plays an important role in immunity and in the regulation of growth and development in lampreys. However, the mechanism through which LIP regulates growth and development remains unclear. Methods: Here, a zebrafish model of LIP overexpression was established through the delivery of a transgenic plasmid to the fertilized egg. The biological function of LIP was explored in vivo through phenotypic characteristics, comparative transcriptome sequencing, and physiological and biochemical analyses. Results: LIP caused developmental toxicity in zebrafish, increasing embryo mortality and exhibiting strong teratogenic, lethal, and developmental inhibitory effects. Comparative transcriptome analysis showed that LIP-induced large-scale cell death by triggering the ferroptosis pathway. Furthermore, LIP-induced lipid peroxidation and ferroptosis trigger pericardial edema. Direct inhibition of acsl4a and tfr1a, or silencing of acsl4a and tfr1a with specific siRNA suppressed ferroptosis and pericardial edema. Conclusions: Taken together, we confirmed that LIP can participate in growth and development via the regulation of lipid peroxidation and ferroptosis. This lays the foundation for future studies on the function of LIP in lampreys.