This study identified a novel anti-dry eye peptide (NGGPSGPR, NGG) from tilapia skin peptides using in silico, in vitro, and in vivo methods. NGG restored cell viability and inhibited COX-2 expression in hyperosmolar-stressed human corneal epithelial cells, and in a mouse dry eye model it increased tear production, reduced tear ferning, prevented corneal thinning, and reduced goblet cell loss and apoptosis. These findings suggest NGG could be developed as a functional food ingredient or therapeutic agent for dry eye disease.