This work reports a highly efficient electrogenerated chemiluminescence (ECL) quenching on lipid-coated multifunctional magnetic nanoparticles (MMNP) for the determination of proteases incorporating membrane-confined quenching with a specific cleavage reaction for the first time. A new ruthenium complex [Ru(bpy)2(ddcbpy)](PF6)2 (bpy = 2,2'-bipyridine, ddcbpy = 4,4'-didodecyl-carbonyl-2,2'-bipyridine with two hydrophobic long alkyl chains) was synthesized as a signal probe, while [cholesterol-(CH2)6-HSSKLQK(peptide)-ferrocene (quencher)] was designed as a specific peptide-quencher probe. The MMNP were prepared by inserting both the signal probe and the peptide-quencher probe into the cholesterol-phospholipid-coated Fe3O4 magnetic nanoparticles (Fe3O4 NP, ∼200 nm). When prostate specific antigen (PSA) taken as a model analyte was introduced into the suspension of MMNP, PSA cleaved the amide bond of SK in cholesterol-(CH2)6-HSSKLQK-Fc, and then the cleaved peptide-motif-Fc-quencher was deviated from the MMNP, resulting in the increase in the ECL intensity. It was found that the ECL quenching constant of [Ru(bpy)2(ddcbpy)]2+ on MMNP (KSV, NP/lipECL =2.68 × 107 M-1) is 137-folds higher than that on the lipid-coated electrode (KSV, lipECL=1.95 × 105 M-1) and 391-folds higher than that in the solution (KSV, aqECL =6.86 × 104 M-1). The ECL emission of Ru(bpy)32+ derivative-attached Fe3O4 NP was observed at ∼1.2 V, involving the tunnel-electron transfer pathway (TPA• + Ru(bpy)33+ = Ru(bpy)32+*). Based on the highly efficient ECL quenching of the ruthenium complex by ferrocene on the MMNP, a new ECL method was developed for PSA with a linear range from 0.01 to 1.0 ng/mL and a limit of detection of 3.0 pg/mL. This work demonstrates that the approach of ECL quenching by ferrocene on lipid-coated Fe3O4 NP is promising and could be easily extended to determine other proteases.