Alzheimer's disease (AD) is a progressive, multifactorial, neurodegenerative disorder affecting >6 million Americans. Chronic, low-grade neuroinflammation, and insulin resistance may drive AD pathogenesis. We explored the neurophysiological and neuropsychological effects of NE3107, an oral, anti-inflammatory, insulin-sensitizing molecule, in AD. In this phase 2, open-label study, 23 patients with mild cognitive impairment or mild dementia received 20-mg oral NE3107 twice daily for 3 months. Primary endpoints assessed changes from baseline in neurophysiological health and oxidative stress (glutathione level) using advanced neuroimaging analyses. Secondary endpoints evaluated changes from baseline in neuropsychological health using cognitive assessments, including the 11-item Alzheimer's Disease Assessment Scale-Cognitive Subscale (ADAS-Cog11), Mini-Mental State Examination (MMSE), Montreal Cognitive Assessment, Clinical Dementia Rating, Quick Dementia Rating Scale, Alzheimer's Disease Composite Score, and Global Rating of Change (GRC). Exploratory endpoints assessed changes from baseline in neuroinflammation biomarkers (tumor necrosis factor alpha, TNF-α) and AD (amyloid beta and phosphorylated tau [P-tau]). NE3107 was associated with clinician-rated improvements in cerebral blood flow and functional connectivity within the brain. In patients with MMSE ≥ 20 (mild cognitive impairment to mild AD; n = 17), NE3107 was associated with directional, but statistically nonsignificant, changes in brain glutathione levels, along with statistically significant improvements in ADAS-Cog11 (P = .017), Clinical Dementia Rating (P = .042), Quick Dementia Rating Scale (P = .002), Alzheimer's Disease Composite Score (P = .0094), and clinician-rated GRC (P < .001), as well as in cerebrospinal fluid P-tau levels (P = .034) and P-tau:amyloid beta 42 ratio (P = .04). Biomarker analyses also demonstrated directional, but statistically non-significant, changes in plasma TNF-α, consistent with the expected mechanism of NE3107. Importantly, we observed a statistically significant correlation (r = 0.59) between improvements in TNF-α levels and ADAS-Cog11 scores (P = .026) in patients with baseline MMSE ≥ 20. Our results indicate that in this study NE3107 was associated with what appear to be positive neurophysiological and neuropsychological findings, as well as evidence of improvement in biomarkers associated with neuroinflammation and AD in patients diagnosed with dementia. Our findings are consistent with previous preclinical and clinical observations and highlight a central role of neuroinflammation in AD pathogenesis.