Echinacoside (ECH), a phenylethanoid glycoside, has protective activity in neurodegenerative disease, including anti-inflammation and antioxidation. However, the effects of ECH in Alzheimer’s disease (AD) are not very clear. This present study investigates the role and mechanism of ECH in the pathological process of AD. APP/PS1 mice treated with ECH in 50 mg/kg/day for 3 months. Morris water maze, nesting test, and immunofluorescence staining used to observe whether ECH could improve AD pathology. Western blot used to study the mechanism of ECH improving AD pathology. The results showed that ECH alleviated the memory impairment of APP/PS1 mice by reducing the time of escape latency as well as increasing the times of crossing the platform and rescued the impaired ability to construct nests. In addition, ECH significantly reduced the deposition of senile plaques in the brain and decreased the expression of BACE1 in APP/PS1 mice through activating PI3K/AKT/Nrf2/PPARγ pathway. Furthermore, ECH decreased ROS formation, GP91 and 8-OHdG expression, upregulated the expression of SOD1 and SOD2 as well as activating the PI3K/AKT/Nrf2 signaling pathway. Moreover, ECH inhibited glia cells activation, pro-inflammatory cytokine IL-1β and TNF-α release, NLRP3 inflammasome formation through TXNIP/Trx-1 signaling pathway. In conclusion, this paper reported that ECH improved cognitive function, inhibited oxidative stress, and inflammatory response in AD. Therefore, we suggest that ECH may considered as a potential drug for AD treatment.