Acetylcholinesterase (AChE) inhibitors play a crucial role in the treatment of Alzheimer’s disease. These drugs increase acetylcholine levels by inhibiting the enzyme responsible for its degradation, which is a vital neurotransmitter involved in memory and cognition. This intervention intermittently improves cognitive symptoms and augments neurotransmission. This study investigates the potential of Psidium guajava fruit extract as an acetylcholinesterase (AChE) inhibitor for Alzheimer’s disease treatment. Molecular characteristics and drug-likeness were analyzed after HR-LCMS revealed phytocompounds in an ethanolic extract of Psidium guajava fruit. Selected phytocompounds were subjected to molecular docking against AChE, with the best-docked compound then undergoing MD simulation, MMGBSA, DCCM, FEL, and PCA investigations to evaluate the complex stability. The hit compound’s potential toxicity and further pharmacokinetic features were also predicted. Anticholinesterase activity was also studied using in vitro assay. The HR-LCMS uncovered 68 compounds. Based on computational analysis, Fluspirilene was determined to have the highest potential to inhibit AChE. It was discovered that the Fluspirilene-AChE complex is stable and that Fluspirilene has a high binding affinity for AChE. Extract of Psidium guajava fruit significantly inhibits AChE (88.37% at 200 μg/ml). It is comparable to the standard AChE inhibitor Galantamine. Fluspirilene exhibited remarkable binding to AChE. Psidium guajava fruit extract demonstrated substantial AChE inhibitory activity, indicating its potential for Alzheimer’s treatment. The study underscores natural sources’ significance in drug discovery. Communicated by Ramaswamy H. Sarma