Impaired memory and cognitive function are the main features of Alzheimer’s disease (AD). Unfortunately, currently available treatments cannot cure or delay AD progression. Moreover, the blood–brain barrier hampers effective delivery of treatment to the brain. Therefore, we aimed to evaluate the impact of intranasally delivered luteolin on AD using bile-salt-based nano-vesicles (bilosomes). Different bilosomes were prepared using 23-factorial design. The variables were defined by the concentration of surfactant, the molar ratio of cholesterol:phospholipid, and the concentration of bile salt. Results demonstrated optimized luteolin-loaded bilosomes with particle size (153.2 ± 0.98 nm), zeta potential (−42.8 ± 0.24 mV), entrapment efficiency% (70.4 ± 0.77%), and % drug released after 8 h (80.0 ± 1.10%). In vivo experiments were conducted on an AD mouse model via intracerebroventricular injection of 3 mg/kg streptozotocin. We conducted behavioral, biochemical marker, histological, and immune histochemistry assays after administering a luteolin suspension or luteolin bilosomes (50 mg/kg) intranasally for 21 consecutive days. Luteolin bilosomes improved short-term and long-term spatial memory. They also exhibited antioxidant properties and reduced levels of proinflammatory mediators. They also suppressed both amyloid β aggregation and hyperphosphorylated Tau protein levels in the hippocampus. In conclusion, luteolin bilosomes are an effective, safe, and non-invasive approach with superior cognitive function capabilities compared to luteolin suspension.