This work was aimed at producing peptides containing iron-binding capabilities from scad (Decapterus maruadsi) processing by-product with alcalase hydrolysis. The chelating peptides were purified by ultrafiltration, immobilized-metal affinity chromatography, gel filtration chromatography, and reversed-phase high-performance liquid chromatography. A novel iron-binding peptide was purified with 1,386.63 Da molecular weight and amino acid sequence of QKGTYDDYVEGL. The peptide binds to iron mainly through carboxyl and hydroxyl oxygen bonds. The iron-binding peptide can significantly promote the absorption of inorganic iron in Caco-2 cells. These results have contributed to development of the peptide from scad processing by-products hydrolyzate in iron supplementations. PRACTICAL APPLICATIONS: Iron deficiency is one of the most common and widespread nutritional disorders in the world. Iron-peptide chelates may be suitable for iron-fortification. Our study shows that a peptide purified from scad processing by-product has iron-chelating activity, and significantly increases iron absorption by Caco-2 cells. Hence, this peptide has potential application as a novel carrier for enhancing iron absorption.