Microglial activation and neuroinflammation induced by amyloid β (Aβ) play pivotal roles in Alzheimer’s disease (AD) pathogenesis. Astragaloside IV (AS-IV) is one of the major active compounds of the traditional Chinese medicine Astmgali Radix. It has been reported that AS-IV could protect against Aβ-induced neuroinflammation and cognitive impairment, but the underlying mechanisms need to be further clarified. In this study, the therapeutic effects of AS-IV were investigated in an oligomeric Aβ (oAβ) induced AD mice model. The effects of AS-IV on microglial activation, neuronal damage and reduced nicotinamide adenine dinucleotide phosphate (NADPH) oxidase expression were further studied. Different doses of AS-IV were administered intragastrically once a day after intracerebroventricularly oAβ injection. Results of behavioral experiments including novel object recognition (NOR) test and Morris water maze (MWM) test revealed that AS-IV administration could significantly ameliorate oAβ-induced cognitive impairment in a dose dependent manner. Enzyme linked immunosorbent assay (ELISA) results showed that increased levels of reactive oxygen species (ROS), tumor necrosis factor α (TNF-α), interleukin-1β (IL-1β) and IL-6 in hippocampal tissues induced by oAβ injection were remarkably inhibited after AS-IV treatment. OAβ induced microglial activation and neuronal damage was significantly suppressed in AS-IV-treated mice brain, observed in immunohistochemistry results. Furthermore, oAβ upregulated protein expression of NADPH oxidase subunits gp91phox, p47phox, p22phox and p67phox were remarkably reduced by AS-IV in Western blotting assay. These results revealed that AS-IV could ameliorate oAβ-induced cognitive impairment, neuroinflammation and neuronal damage, which were possibly mediated by inhibition of microglial activation and down-regulation of NADPH oxidase protein expression. Our findings provide new insights of AS-IV for the treatment of neuroinflammation related diseases such as AD.