Alzheimer’s disease (AD) is the most common neurodegenerative disorder associated with aging. There are currently no effective treatments for AD. Bazhu decoction (BZD), a traditional Chinese medicine (TCM) formula, has been employed clinically to alleviate AD. However, the underlying molecular mechanisms are still unclear. Here we found that middle- and high-doses of BZD ameliorated the behavioral aspects of 5xFAD transgenic mice in elevated plus maze, Y maze and Morris water maze tests. Moreover, BZD reduced the protein levels of BACE1 and PS1, resulting in a reduction of Aβ plaques. We also identified a beneficial effect of BZD on oxidative stress by attenuating MDA levels and SOD activity in the brains of 5xFAD mice. Together, these results indicate that BZD produces a dose-dependent positive effect on 5xFAD transgenic mouse model by decreasing APP processing and Aβ plaques, and by ameliorating oxidative damage. BZD may play a protective role in the cognitive and anxiety impairments and may be a complementary therapeutic option for AD.