Alzheimer’s disease (AD) is a neurodegenerative disorder that is projected by the WHO to affect over 100 million people by 2050. Clinically, AD patients undergoing long-term antipsychotic treatment often experience severe anxiety or depression in later stages. Furthermore, early-stage AD manifests with weakened α waves in the brain, progressing to diminished α and β waves in late-stage disease, reflecting changes in emotional states and disease progression. In this study, EEG signal analysis revealed that inhalation of Dalbergia pinnata (Lour.) Prain essential oil (DPEO) enhanced δ, θ, α and β wave powers in the frontal and parietal lobes, with a rising trend in the β/α ratio in the temporal lobe. These findings suggest an alleviation of anxiety and an enhancement of cognitive functions. Treatment of the AD SH-SY5Y (human neuroblastoma cells) cell model with DPEO resulted in decreased intracellular levels of Aβ, GSK-3β, P-Tau, IL-1β, TNF-α, IL-6, COX-2, OFR, and HFR, alongside reduced AchE and BchE activities and increased SOD activity. Network pharmacology analysis indicated a potential pharmacological mechanism involving the JAK-STAT pathway. Our study provides evidence supporting DPEO’s role in modulating anxiety and slowing AD pathological progression.