Background: In this study, we elucidated the neuroprotective effect of dioscin, a plant-derived steroidal saponin utilized in Chinese medicine to treat various diseases. To achieve this, we established the aluminum chloride–induced Alzheimer's disease rat model. Materials and Methods: Young, healthy, male Wistar rats were grouped into five: control, Alzheimer's disease–induced, Alzheimer's disease–induced and treated with 10 mg/kg dioscin, Alzheimer's disease–induced and treated with 20 mg/kg dioscin, and Alzheimer's disease–induced and treated with standard neuroprotective drug donepezil (1.5 mg/kg/day) by oral route. After completion of the treatment period, the animals were subjected to behavioral, biochemical, molecular, and histological analyses. Morris water maze and open-field tests were conducted to analyze the behavior of the animals. Acetylcholinesterase, glutamate, neurotransmitters, and oxidative stress markers were quantified to assess the biochemical changes in Alzheimer's-induced and dioscin-treated rats. Furthermore, quantitative polymerase chain reaction (qPCR) analysis was done to assess the mRNA expression of proinflammatory genes, and the neuroprotective effect of dioscin was confirmed with histopathological analysis of hippocampal region. Results: Aluminum chloride–induced neurodegeneration in rats was evident with behavioral, biochemical, molecular, and histological analyses. The results of behavioral analysis revealed that dioscin treatment increased the memory in Alzheimer's-induced rats. It also decreased the oxidative stress markers, and increased the level of norepinephrine and dopamine neurotransmitters involved in cognition. The mRNA expression of proinflammatory cytokines was significantly decreased in Alzheimer's-induced dioscin-treated rats. Histopathological analysis revealed that dioscin protects the hippocampus from aluminum chloride–induced neurodegeneration. Discussion: Overall our results confirmed that dioscin is a potent neuroprotectant and can be utilized to treat Alzheimer's disease in the future.