Mitochondrial dysfunction and elevated ROS generation are predominant contributors of neuronal death that is responsible for the diabetes-related cognitive impairments. Emerging evidence has demonstrated that long noncoding RNA-MEG3 can serve as an important regulator in the pathogenesis of diabetes. However, the underlying mechanisms remain to be further clarified. Here, it was observed that MEG3 was significantly down-regulated in STZ (streptozotocin)-induced diabetic rats. MEG3 overexpression noticeably improved diabetes-induced cognitive dysfunctions, accompanied by the abatement of Rac1 activation and ROS production, as well as the inhibition of mitochondria-associated apoptosis. Furthermore, either MEG3 overexpression or Rac1 inhibition promoted FUNDC1 dephosphorylation and suppressed oxidative stress and neuro-inflammation. Similarly, in vitro studies confirmed that hyperglycemia also down-regulated MEG3 expression in PC12 cells. MEG3 reintroduction protected PC12 cells against hyperglycemia-triggered neurotoxicity by improving mitochondrial fitness and repressing mitochondria-mediated apoptosis. Moreover, these neuroprotective effects of MEG3 relied on FUNDC1-related mitophagy, since silencing of FUNDC1 abolished these beneficial outcomes. Additionally, MEG3 rescued HG-induced neurotoxicity was involved in inhibiting Rac1 expression via interaction with Rac1 3'UTR. Conversely, knockdown of MEG3 showed opposite effects. NSC23766, a specific inhibitor of Rac1, fully abolished harmful effects of MEG3 depletion. Consistently, knockdown of Rac1 potentiated FUNDC1-associated mitophagy. Meanwhile, colocalization of Rac1 and FUNDC1 was found in mitochondria under hyperglycemia, which was interrupted by MEG3 overexpression. Furthermore, silencing of Rac1 promoted PGAM5 expression, and FUNDC1 strongly interacted with LC3 in Rac1-deleted cells. Altogether, our findings suggested that the Rac1/ROS axis may be a downstream signaling pathway for MEG3-induced neuroprotection, which was involved in FUNDC1-associated mitophagy.