The development of label-free optical biosensors for DNA and other biomolecules has the potential to impact life sciences as well as screening in medical and environmental applications. In this report, we developed a localized surface plasmon resonance (LSPR) based label-free optical biosensor based on a gold-capped nanoparticle layer substrate immobilized with peptide nucleic acids (PNAs). PNA probe was designed to recognize the target DNA related to tumor necrosis factor. The nanoparticle layer was formed on a gold-deposited glass substrate by the surface modified silica nanoparticles using silane-coupling reagent. The optical properties of gold-capped nanoparticle layer substrate were characterized through monitoring the changes in the absorbance strength, as the thickness of the biomolecular layer increased with hybridization. The detection of PNA-DNA hybridization with target oligonucleotides and PCR-amplified real samples were performed with a limit of detection value of 0.677 pM target DNA. Selective discrimination against a single-base mismatch was also achieved. Our LSPR-based biosensor with the gold-capped nanoparticle layer substrate is applicable to the design of biosensors for monitoring of the interaction of other biomolecules, such as proteins, whole cells, or receptors with a massively parallel detection capability in a highly miniaturized package.