Propolis, a product of the honey bee, has been used in traditional medicine for many years. A hydrophobic bioactive polyphenolic ester, caffeic acid phenethyl ester (CAPE), is one of the most extensively investigated active components of propolis. Several studies have indicated that CAPE has a broad spectrum of pharmacological activities as anti-oxidant, anti-inflammatory, anti-viral, anti-fungal, anti-proliferative, and anti-neoplastic properties. This review largely describes CAPE neuroprotective effects in many different conditions and summarizes its molecular mechanisms of action. CAPE was found to have a neuroprotective effect on different neurodegenerative disorders. At the basis of these effects, CAPE has the ability to protect neurons from several underlying causes of various human neurologic diseases, such as oxidative stress, apoptosis dysregulation, and brain inflammation. CAPE can also protect the nervous system from some diseases which negatively affect it, such as diabetes, septic shock, and hepatic encephalopathy, while numerous studies have demonstrated the neuroprotective effects of CAPE against adverse reactions induced by different neurotoxic substances. The potential role of CAPE in protecting the central nervous system (CNS) from secondary injury following various CNS ischemic conditions and CAPE anti-cancer activity in CNS is also reviewed. The structure–activity relationship of CAPE synthetic derivatives is discussed as well.