Aggregation and accumulation of the 42-residue amyloid β peptide (Aβ42) in the extracellular matrix and within neuronal cells is considered a major cause of neuronal cell cytotoxicity and death in Alzheimer’s disease (AD) patients. Therefore, molecules that bind to Aβ42 and prevent its aggregation are therapeutically promising as AD treatment. Here, we show that a non-self-aggregating Aβ42 variant carrying two surface mutations, F19S and L34P (Aβ42DM), inhibits wild-type Aβ42 aggregation and significantly reduces Aβ42-mediated cell cytotoxicity. In addition, Aβ42DM inhibits the uptake and internalization of extracellularly added pre-formed Aβ42 aggregates into cells. This was the case in both neuronal and non-neuronal cells co-expressing Aβ42 and Aβ42DM or following pre-treatment of cells with extracellular soluble forms of the two peptides, even at high Aβ42 to Aβ42DM molar ratios. In cells, Aβ42DM associates with Aβ42, while in vitro, the two soluble recombinant peptides exhibit nano-molar binding affinity. Importantly, Aβ42DM potently suppresses Aβ42 amyloid aggregation in vitro, as demonstrated by thioflavin T fluorescence and transmission electron microscopy for detecting amyloid fibrils. Overall, we present a new approach for inhibiting Aβ42 fibril formation both within and outside cells. Accordingly, Aβ42DM should be evaluated in vivo for potential use as a therapeutic lead for treating AD.