Background: Aluminum chloride (AlCl3) is an environmental neurotoxin that affects cerebral functions and causes health complications. However, the role of AlCl3 in arbitrating glia homeostasis and pathophysiology remains obscure. Objectives: In this study, we analyzed the role of AlCl3 in causing reactive gliosis in the brain of rats and the ability of Shikonin to attenuate reactive gliosis and neuronal inflammation. Materials and Methods: In our study, animals were divided into five different groups. The status of AlCl3-induced alterations in neurobehavioral status, estimation of acetylcholinesterase (AChE) and Aβ1 peptide in rat brain, oxidative stress (lipid peroxidation [LPO] and nitric oxide [NO]), antioxidant levels (superoxide dismutase [SOD], Catalase [CAT], and glutathione [GSH]), inflammatory marker levels (interleukin-1β [IL-1β], interleukin-6 [IL-6], and tumor necrosis factor-alpha [TNF-α]), and histopathological changes were analyzed and the neuroprotective effect of Shikonin investigated. Results: Treatment with Shikonin significantly restored the changes in the open field test, Morris water maze test, and Y-maze spontaneous alteration test in Alzheimer’s disease (AD) rats induced by AlCl3. Shikonin treatment significantly reduced levels of AChE and Aβ1 peptide content in AD rat brain tissues induced with AlCl3. Furthermore, Shikonin treatment significantly reduced the levels of oxidative stress markers and restored the levels of endogenous antioxidants in AlCl3-induced AD rats. Levels of inflammatory cytokines were significantly reduced upon Shikonin treatment in AD rats induced with AlCl3. In accordance with the aforementioned benefits, treatment with Shikonin significantly restored the histological aberrations and infiltration of granular cells white blood cells (WBCs) in brain tissues of AD rats induced with AlCl3. Conclusion: Collectively, our results showed that Shikonin significantly restored altered neurobehavioral changes and antioxidant levels, and reduced oxidative stress and the inflammatory milieu. Additionally, histological abnormalities support its neuroprotective effectiveness under experimentally induced Alzheimer’s disease conditions caused by AlCl3 in rats.