Hepatic encephalopathy (HE) is a neuropsychiatric syndrome that can occur in people with acute or chronic liver disease. Here, we investigated the effects of menthol, a natural monoterpene, on HE induced by thioacetamide (TA) in male Wistar rats. The rats received 200 mg/kg of TA twice a week for four weeks and were administered 10 mg/kg of menthol intraperitoneally daily for the same period. The results showed that menthol treatment reduced oxidative stress and inflammation in the livers and hippocampi of the rats that received TA. It also lowered the levels of ammonium and liver enzymes AST, ALT, ALP, and GGT in the serum of these animals and prevented liver histopathological damage. In addition, the expression and activity of acetylcholinesterase in the hippocampus of HE model rats were decreased by menthol. Likewise, this monoterpene reduced the expression of TLR4, MyD88, and NF-κB in the hippocampus while increasing the expression of BDNF and α7-nACh receptor. Menthol also reduced neuronal death in the hippocampal cornu ammonis-1 and dentate gyrus regions and reduced astrocyte swelling, which led to improved learning and spatial memory in rats with HE. In conclusion, the study suggests that menthol may have strong protective effects on the liver and brain, making it a potential treatment for HE and neurodegenerative diseases.