Supplementation of glutathione (GSH) levels through varying formulations or precursors has thus far appeared to be a tenable strategy to ameliorate disease-associated oxidative stress. Metabolic liability of GSH and its precursors, i.e., hydrolysis by the ubiquitous γ-glutamyl transpeptidase (γ-GT), has limited successful clinical translation due to poor bioavailability. We addressed this problem through the design of γ-GT-resistant GSH analogue, ψ-GSH, which successfully substituted in GSH-dependent enzymatic systems and also offered promise as a therapeutic for Alzheimer’s disease (AD). With the aim to improve its bioavailability, we studied the utility of a ψ-GSH precursor, dipeptide 2, as a potential AD therapeutic. Compound 2 retains the γ-GT stable ureide linkage and the thiol group for antioxidant property. By engaging glutathione synthetase, compound 2 was able to generate ψ-GSH in vivo. It was found to be a modest cofactor of glutathione peroxidase and prevented cytotoxicity of Aβ1–42-aggregates in vitro. Studies of compound 2 in an acute AD model generated by intracerebroventricular injection of Aβ1–42 showed cognitive benefits, which were augmented by its combination with glycine along with mitigation of oxidative stress and inflammatory pathology. Collectively, these results support further optimization and evaluation of ψ-GSH dipeptide as a potential therapeutic in transgenic AD models.