Inflammation is considered as an early event in the development of Alzheimer’s disease (AD) that precedes the formation of Aβ plaques and neurofibrillary tangles. Therefore, strategies aimed at attenuating inflammation by phytochemicals may be a potential therapeutic intervention against AD. The present study was designed to evaluate if colchicine-induced inflammation and Aβ production could be prevented by Bacopa monnieri (BM) supplementation. Dementia was induced by a single intracerebroventicular injection of colchicine (15 μg/5 μl), whereas, BM extract was administered orally (50 mg/kg body weight, daily) for 15 days. Assessment of cognitive functions using Morris water maze revealed deficits in colchicine administered animals. This was accompanied by significant increase in oxidative stress in terms of accentuated ROS and NO production. Expression of pro-inflammatory cytokines (IL-6, TNF-α) and chemokine (MCP-1) increased in the brain regions. Furthermore, COX-2 and iNOS expression also increased significantly in the brain regions of colchicine-administered animals. In addition, BACE-1 activity increased in the colchicine treated animals, which was accompanied by enhanced Aβ production. On the other hand, BM supplementation was able to improve cognitive functions, suppress Aβ formation by reducing BACE-1 activity. Inflammatory and oxidative stress markers were attenuated in the brain regions of BM supplemented animals. Taken together, the findings reveal that BM reverses colchicine-induced dementia by its anti-inflammatory and anti-oxidant action suggesting that it may be an effective therapeutic intervention to ameliorate progression of AD.