The deposition of amyloid beta (Aβ) is a neuropathological feature of Alzheimer's disease (AD). Cordyceps militaris is an edible medicinal fungus in Asian countries with antioxidative, antiaging, antitumor, and immunomodulatory effects. In this study, we investigated the neuroprotective mechanisms of C. militaris in the brain of Aβ1-42-injected AD mice. An intracerebroventricular injection of Aβ1-42 (total 3 µg/mouse) resulted in neurological damage, including amyloidogenesis and neuroinflammation; however, C. militaris attenuated Aβ1-42-induced amyloidogenesis and inflammatory responses. Oral administration of C. militaris at concentrations of 100 and 200 mg/kg suppressed acetylcholinesterase activity. In addition, C. militaris treatment downregulated amyloid precursor protein levels, with a decrease in β-secretase activity. Moreover, C. militaris significantly enhanced the expression of brain-derived neurotrophic factor. Furthermore, C. militaris-administered groups had inactivated inflammatory responses by downregulation of inducible nitric oxide synthase and cyclooxygenase-2 protein expression. The injection of Aβ1-42 resulted in the activation of p38 MAPK and c-Jun N-terminal kinase, which was rescued by C. militaris. These results suggest that C. militaris has a protective effect against Aβ1-42-induced neurological damage.