Food-derived bioactive peptides exhibit good health-promoting effects. In this study, low molecular weight chicken intestine peptide (CIP) below 2 kDa is prepared through trypsin hydrolysis of chicken intestine and ultrafiltration, and the hepatoprotective effects of CIP and underlying mechanisms were investigated. Our findings indicated that CIP alleviated acute liver injury induced by alcohol in mice. Because of iron chelating properties and free radical scavenging activities, CIP inhibited the overload of free iron and the accumulation of lipid peroxides in liver tissues, thereby suppressing alcohol-induced ferroptosis of hepatocytes. In vitro studies demonstrated that CIP suppressed lipid peroxidation and subsequent ferroptosis of HepG2 cells induced by hydrogen peroxide. Mechanistic studies further revealed that CIP promoted the expression and activation of nuclear factor erythroid 2-related factor 2 (NRF2), leading to the increased transcription of antioxidant response elements and solute carrier family 7 member 11 (SLC7A11). This promoted the synthesis of glutathione and enhanced the enzyme activity of glutathione peroxidase 4 (GPX4), facilitating the clearance of lipid peroxides. These findings suggest that CIP holds promise for the prevention and treatment of alcoholic liver disease and other oxidative stress-related liver diseases.