Limited efficacy of current antivirals and antiviral-resistant mutations impairs anti-influenza treatment. Here, we evaluate the in vitro and in vivo antiviral effect of three defective interfering genes (DIG-3) of influenza virus. Viral replication is significantly reduced in cell lines transfected with DIG-3. Mice treated with DIG-3 encoded by jetPEI-vector, as prophylaxis and therapeutics against A(H7N7) virus, respectively, have significantly better survivals (80% and 50%) than control mice (0%). We further develop a dual-functional peptide TAT-P1, which delivers DIG-3 with high efficiency and concomitantly exerts antiviral activity by preventing endosomal acidification. TAT-P1/DIG-3 is more effective than jetPEI/DIG-3 in treating A(H7N7) or A(H1N1)pdm09-infected mice and shows potent prophylactic protection on A(H7N7) or A(H1N1)pdm09-infected mice. The addition of P1 peptide, which prevents endosomal acidification, can enhance the protection of TAT-P1/DIG-3 on A(H1N1)pdm09-infected mice. Dual-functional TAT-P1 with DIG-3 can effectively protect or treat mice infected by avian and seasonal influenza virus.