A simple green route has been developed for the synthesis of casein peptide functionalized gold nanoparticles (AuNPs), in which casein peptide acts as a reducing as well as the stabilizing agent. In this report, AuNPs have been characterized on the basis of spectroscopic and microscopic results; which showed selective and sensitive response toward Al3+ in aqueous media, and Al3+ induces aggregation of AuNPs. The sensing study performed for Al3+ revealed that the color change from red to blue was due to a red-shift in the surface plasmon resonance (SPR) band and the formation of aggregated species of AuNPs. The calibration curve determines the detection limit (LOD) for Al3+ about 20 ppb (0.067 μM) is presented using both decrease and increase in absorbance at 530 and 700 nm, respectively. This value is considerably lower than the higher limit allowed for Al3+ in drinking water by the world health organization (WHO) (7.41 μM), representing enough sensitivity to protect water quality. The intensity of the red-shifted band increases with linear pattern upon the interaction with different concentrations of Al3+, thus the possibility of producing unstable AuNPs aggregates. The method is successfully used for the detection of Al3+ in water samples collected from various sources, human urine and ionic drink. The actual response time required for AuNPs is about 1 min, this probe also have several advantages, such as ease of synthesis, functionalization and its use, high sensitivity, and enabling on-site monitoring.