A new octamolybdate based organic–inorganic hybrid compound with unusual Ag–Ag chain, [Ag2(bit)2]2[Mo8O26], was successfully synthesized and well characterized. [Ag2(bit)2]2[Mo8O26] as colorimetric sensor materials for l-cysteine (l-Cys) were investigated for the first time. Similar to other type polyoxometalates (POMs), [Ag2(bit)2]2[Mo8O26] exhibits the good peroxidase-like activity attributed to the nature of [Mo8O26]4−, indicating that the polyoxomolybdate based hybrid materials can perform colorimetric sensing to detection biomolecule such as l-Cys. Moreover, to improve the peroxidase-like activity, [Ag2(bit)2]2[Mo8O26]/PPy nanocomposite was also fabricated, and [Ag2(bit)2]2[Mo8O26]/PPy based colorimetric sensing towards l-Cys exhibits the limit of detection of 0.22 μM in the linear range of 1–100 μM, being superior than most reported nanozyme. [ABSTRACT FROM AUTHOR]