Holigarna caustica (Dennst.), a popular plant used in folk medicine in Bangladesh, is often used by the local folk practitioner to treat a variety of chronic diseases. The present research is an attempt to find out an innovative therapeutic prospect for the management of neuropsychiatric disorders. The methanol extract of H. caustica leaves (MEHC) were utilized on various behavioral tests for assessing anxiolytic, anti-depressant, and anti-inflammatory activities. The antioxidant potentials and quantitative phytochemicals were evaluated through spectrophotometric methods. Results revealed that treatment of MEHC (200 and 400 mg/kg) significantly reduced anxiety like behaviors in mice, particularly, 400 mg/kg efficiently improved % of entries and time spent (p < 0.05) in the open arms in elevated plus maze test, whereas, superior head dipping tendency (p < 0.05) was observed in hole-board test. In contrast, mice treated with 200 mg/kg revealed better anxiolytic effect in both open field and hole-cross tests. During antidepressant evaluation, mice administrated with MEHC exhibited active behaviors (swimming and struggling) in forced swimming and tail suspension tests. In parallel, MEHC manifested a noteworthy (p < 0.001) suppression of inflammatory response induced by histamine. The MEHC also showed strong antioxidant activities in 1,1-diphenyl-2-picrylhydrazyl radical (DPPH) (IC50: 57.64 μg/mL) scavenging, H2O2 (IC50: 51.60 μg/mL) scavenging, and ferric reducing power assay. The levels of total phenol, flavonoid, flavonol, condensed tannin, and antioxidant were estimated as higher in MEHC. Moreover, 11 compounds were documented as bioactive, displayed good binding affinities to potassium channel receptor, human serotonin receptor, cyclooxygenase (COX-1 and 2), and xanthine oxidoreductase enzyme targets in molecular docking experiments. Furthermore, ADME/T and Prediction of Activity Spectra for Substances (PASS) analyses exposed their drug-likeness, nontoxic upon consumption, and likely pharmacological actions. Overall, the H. caustica is potentially bioactive as evident by in vivo, in vitro, and computational analysis. Our findings support the folkloric value of this plant, which may provide a potential source towards developing drug leads.