Microglia-mediated neuroinflammation plays a crucial role in memory and cognitive deficits and the development of early mild cognitive impairment (MCI) associated with Alzheimer’s disease (AD). Paeoniflorin (PF) has been established as an effective antioxidant and anti-apoptotic agent. This study investigated the protective effects of PF on neuroinflammation, amyloidogenesis, and memory impairments in lipopolysaccharide (LPS)-stimulated BV-2 microglial cells and a C57BL/6 J amnesic mouse model. In BV-2 microglial cells, PF treatment inhibited LPS-stimulated nitric oxide (NO) production, attenuated microglial overactivation, and suppressed the excessive release of inflammatory mediators (iNOS and COX-2) in a concentration-dependent manner. More crucially, PF regulated the LPS-stimulated phosphorylation of mitogen-activated protein kinases (MAPKs)—including p38, ERK, and JNK—while also suppressing NF-κB nuclear transport and inhibiting IκB-α phosphorylation. In the in vivo study, PF (10 or 20 mg/kg) treatment significantly improved spatial learning memory and cognitive function and ameliorated memory deficits. Furthermore, PF administration upregulated BDNF, p-CREB, Nrf2, and HO-1 expression, which are biomarkers of neuroprotective and antioxidant effects. This was accompanied by a reduction in markers of neuroinflammation (iNOS and COX-2), the inhibition of microglia and astrocytes overactivation, and decreased expression of amyloidogenic protein markers APP and BACE-1 in the hippocampus and cerebral cortex. Further, PF inhibited the LPS-promoted phosphorylation of MAPK signaling, thereby reducing the phosphorylation level of IκB-α and inhibiting NF-κB activation in the hippocampus and cerebral cortex. Our results suggest that PF confers neuroprotective effects in an LPS model of Alzheimer-associated MCI by regulating the Nrf2/HO-1/BDNF/CREB and APP/BACE-1/NF-κB/MAPK signaling pathways.