Neuroinflammation contributes to the pathogenesis of several neurodegenerative disorders. This study examined the neuroprotective effect of quercetin (QUR)-loaded poly (lactic-co-glycolic) acid (PLGA) nanoparticles (QUR NANO) against the neurotoxicity induced by lipopolysaccharide (LPS) in mice. A QUR NANO formulation was prepared and characterized by differential scanning calorimetry, X-ray diffraction, entrapment efficiency (EE), high-resolution transmission electron microscopy, field emission scanning electron microscopy, and in vitro drug release profile. Levels of glutathione, malondialdehyde, catalase, inducible nitric oxide synthase (iNOS), amyloid beta 42 (Aβ42), β-secretase, gamma-aminobutyric acid (GABA), and acetylcholine esterase (AChE) were measured in the mouse brain tissues. The gene expression of nuclear factor erythroid-related factor 2 (Nrf-2) and heme oxygenase-1 (HO-1) were also determined. The prepared QUR NANO formulation showed 92.07 ± 3.21% EE and drug loading of 4.62 ± 0.55. It exhibited clusters of nano-spherical particles with smooth surface areas, and the loading process was confirmed. In vivo, the QUR NANO preserved the spatial memory of mice and protected the hippocampus from LPS-induced histological lesions. The QUR NANO significantly reduced the levels of malondialdehyde, iNOS, Aβ42, β-secretase, and AChE in brain tissue homogenates. Conversely, QUR NANO increased the glutathione, catalase, and GABA concentrations and upregulated the expression of Nrf-2 and HO-1 genes. Remarkably, the neuroprotective effect of QUR NANO was significantly greater than that of herbal QUR. In summary, the prepared QUR NANO formulation was efficient in mitigating LPS-induced neurotoxicity by reducing memory loss, oxidative stress, and amyloidogenesis while preserving neurotransmission and upregulating the expression of Nrf2 and HO-1 genes. This study addresses several key factors in neuroinflammatory disorders and explores the potential of QUR-loaded nanoparticles as a novel therapeutic approach to alleviate these factors.