Over the last decade, artificial enzymes (nanozymes) have undergone substantial development in the field of sensing. In this study, Au−Ag bimetallic nanoparticles (NPs) decorated on reduced graphene oxide sheets (AuAg-rGO) nanocomposite has been developed as a novel colorimetric probe based on the peroxidase imitating activity of the nanozyme. AuAg-rGO nanocomposite proved to feature an intrinsic peroxidase mimic activity, facilitating the oxidation of a peroxidase substrate like 3,3’,5,5’-tetramethylbenzidine (TMB) with high efficiency to oxidised TMB (blue coloured product) with the aid of hydrogen peroxide (H2O2). The characteristic Michaelis-Menten kinetics study allowed the establishment of the catalytic performance of AuAg-rGO as an artificial enzyme. Glutathione (GSH) displays inhibiting effect on the oxidation of the peroxidase substrate, TMB. Therefore, AuAg-rGO nanozyme was applied for detection of GSH and exhibited exceptional selectivity and sensitivity with a low limit of detection (LOD) of 38 nM within the 0–200 μM concentration range. The artificial nanozyme system reported here is simple, convenient, and straightforward for colorimetric sensing of GSH.