A new magnetic photocatalyst, CoFe2O4/Ag2MoO4, was fabricated by a facile in situ coprecipitation method and characterized by FT-IR, XRD, SEM, TEM, EDX, VSM, DRS, and PL analysis. The photocatalytic performance of CoFe2O4/Ag2MoO4 for the oxidation of benzyl alcohol reached 82% by visible light irradiation, while for the CoFe2O4 and Ag2MoO4 nanoparticles it was 12% and 48%, respectively. This photoactivity enhancement was ascribed to the efficient separation of electron–hole pairs. The trapping experiments confirm the role of both positive holes and hydroxyl radical groups in the suggested mechanism. This heterogeneous photocatalyst was stable enough to be reused six times without considerable changes in performance. The results of this work demonstrate the design of a new stable, inexpensive, and easily separated photocatalyst with high performance, using an environment-friendly oxidant under mild conditions.