Corneal neovascularization (NV) is one of the major sight-threatening pathological changes caused by corneal diseases. Current therapeutics generate various adverse effects. Small peptides derived from endogenous protein display certain advantages. This study aims to evaluate the anti-angiogenic effect and molecular mechanism of a novel peptide ZY-1, derived from placental growth factor-1 (PlGF-1), on corneal NV by topical administration, and to investigate its safety profile after long-term treatment. CCK-8 assay and tube formation assay were used to evaluate the effect of ZY-1 on human umbilical vein endothelial cells (HUVECs). The anti-angiogenic effect of topical ZY-1 was estimated in a rat model of alkali burn induced corneal NV. The safety profile of topical ZY-1 was analyzed by CCK-8 assay, tear film break-up time (BUT), and histological examination. Firstly, we found that ZY-1 co-localized with membrane vascular epithelial growth factor receptor-1 (VEGFR-1) and effectively inhibited VEGF/PlGF-1 induced proliferation and tube formation of HUVECs. The topical ZY-1 administration efficiently inhibited alkali-burn induced corneal NV, while it did not show any significant effect on human corneal epithelial cell (HCEC) proliferation, as well as the functionality and morphology of cornea and conjunctiva. Our findings suggested that topical administration of ZY-1 could effectively and safely inhibit corneal NV partially through competing for VEGFR-1 binding, and it would be a promising alternative for ocular topical anti-angiogenic therapy.