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Abstract The pathogenesis of Alzheimer’s disease (AD) involves multiple cell types including endothelial cells, glia, and neurons. It suggests that therapy against single target in single cell type may not be sufficient to treat AD and therapies with protective effects in multiple cell types may be more effective. Here, we comprehensively investigated the effects of bilobalide on neuroinflammation and Aβ degrading enzymes in AD cell model and mouse model. We find that bilobalide inhibits Aβ-induced and STAT3-dependent expression of TNF-α, IL-1β, and IL-6 in primary astrocyte culture. Bilobalide also induces robust expression of Aβ degrading enzymes like NEP, IDE, and MMP2 to facilitate astrocyte-mediated Aβ clearance. Moreover, bilobalide treatment of astrocyte rescues neuronal deficiency in co-cultured APP/PS1 neurons. Most importantly, bilobalide reduces amyloid and inflammation in AD mouse brain. Taken together, the protective effects of bilobalide in in vitro cultures were fully recapitulated in in vivo AD mouse model. Our study supports that bilobalide has therapeutic potential for AD treatment.