Antibacterial peptides (ABPs) have been proposed as potential candidates for alternative antibacterial agents due to the extensive dissemination of antibiotic resistance. However, ABP isolation from natural resources can be tedious without consistent yield. Moreover, many natural ABPs are not developed for clinical application due to potential toxicity to mammalian cells. Therefore, the objective of this study was to develop a potent ABP with minimal toxicity via phage display selection followed by computer-assisted modification. Briefly, a 12-mer phage-displayed peptide library was used to isolate peptides that bound to the cell surface of Pseudomonas aeruginosa with high affinity. The affinity-selected peptide with the highest selection frequency was modified to PAM-5 (KWKWRPLKRKLVLRM) with enhanced antibacterial features by using an online peptide database. Using in vitro microbroth dilution assay, PAM-5 was shown to be active against a panel of Gram-negative bacteria and selected Gram-positive bacteria. Interestingly, the peptide was stable in human plasma by exhibiting a similar bactericidal effect via ex vivo assay. Scanning electron microscopy and SYTOX Green uptake assay revealed that PAM-5 was able to cause membrane disruption and permeabilization of the bacteria. Additionally, the peptide was also able to bind to bacterial DNA as demonstrated by gel retardation assay. In the time-kill assay, PAM-5 was shown to kill the bacteria rapidly in 10 min. More importantly, PAM-5 was non-cytotoxic to Vero cells and non-haemolytic to human erythrocytes at all concentrations tested for the antibacterial assays. Thus, this study showed that the combination of phage display screening and computer-assisted modification could be used to develop potent novel ABPs, and PAM-5 derived from these approaches is worth to be further elucidated for its potential clinical use.