Alzheimer’s disease (AD) is a multifactorial neurodegenerative disorder associated with the amyloid beta (Aβ) and tau hallmarks. The molecular insights into how neuroinflammation is initially triggered and how it affects neuronal cells are yet at the age of infancy. In this study, SH-SY5Y cells were used as a model for neurons by differentiating and were co-cultured with differentiated THP1 cells (microglia model) as well as treated with Aβ(25–35) and with antioxidant FA to study inflammatory, oxidative stress responses and their effects on co-cultured neurons. Neurons co-cultured with microglial cells showed pronounced increase in ROS levels, NOS expression, truncated N-terminal form (34 kDa) of APE1 expression and AIF’s translocation in the nucleus. The pre-treatment of FA, on the other hand reversed these effects. It was further evaluated how FA/Aβ treatment altered microglial phenotype that in turn affected the neurons. Microglial cells showed M1 phenotype upon Aβ(25–35) stress, while FA induced M2 phenotype against Aβ stress, suggesting that FA alleviated Aβ induced phenotype and its associated effects in the co-cultured neurons by altering the phenotype of microglial cells and induced expression of full length (37 kDa) APE1 enzyme and inhibiting AIF’s nuclear translocation, thus inhibiting apoptosis. This is the first study that revealed Aβ induced cleavage of APE1 enzyme in differentiated neurons, suggesting that APE1 may be the potential early target of Aβ that loses its function and exacerbates AD pathology. FA activated a fully functional form of APE1 against Aβ stress. The impaired function of APE1 could be the initial mechanism by which Aβ induces oxidative and inflammatory responses and dietary phytochemical FA can be a potential therapeutic strategy in managing the disease by activating APE1 that not only repairs oxidative DNA base damage but also maintains mitochondrial function and alleviate neuroinflammatory responses.