The increased prevalence of neurological illnesses is a burgeoning challenge to the public healthcare system and presents greater financial pressure. Formononetin, an O‐methylated isoflavone, has gained a lot of attention due to its neuroprotective potential explored in several investigations. Formononetin is widely found in legumes and several types of clovers including Trifolium pratense L., Astragalus membranaceus, Sophora tomentosa, etc. Formononetin modulates various endogenous mediators to confer neuroprotection. It prevents RAGE activation that results in the inhibition of neuronal damage via downregulating the level of ROS and proinflammatory cytokines. Furthermore, formononetin also increases the expression of ADAM‐10, which affects the pathology of neurodegenerative disease by lowering tau phosphorylation, maintaining synaptic plasticity, and boosting hippocampus neurogenesis. Besides these, formononetin also increases the expression of antioxidants, Nrf‐2, PI3K, ApoJ, and LRP1. Whereas, reduces the expression of p65‐NF‐κB and proinflammatory cytokines. It also inhibits the deposition of Aβ and MAO‐B activity. An inhibition of Aβ/RAGE‐induced activation of MAPK and NOX governs the protection elicited by formononetin against inflammatory and oxidative stress‐induced neuronal damage. Besides this, PI3K/Akt and ER‐α‐mediated activation of ADAM10, ApoJ/LRP1‐mediated clearance of Aβ, and MAO‐B inhibition‐mediated preservation of dopaminergic neurons integrity are the major modulations produced by formononetin. This review covers the biosynthesis of formononetin and key molecular pathways modulated by formononetin to confer neuroprotection.