Neuroinflammation mediated by the activation of microglia and subsequent release of proinflammatory cytokines is a key contributor to the pathogenesis of neurodegenerative disorders. In this study, we investigated the neuroprotective effects of p-coumaric acid (PCA) in a lipopolysaccharide (LPS)-induced rat model of neuroinflammation and cognitive impairment. Neuroinflammation was induced by intracerebroventricular (ICV) administration of 150 µg/kg bacterial endotoxin LPS into the fourth ventricle of Sprague–Dawley rats, whereas PCA (160 mg/kg), Donepezil (DON, 5 mg/kg) were administered orally for a period of 14 days, post-LPS administration. PCA has been reported to be active against LPS-induced sickness behavior and chronic unpredictable mild stress models in mice, whereas DON is a centrally acting acetylcholinesterase inhibitor with documented antineuroinflammatory property. Animals were subjected to the Morris Water Maze to assess spatial memory. ICV administration of LPS caused a significant decline in cognitive ability. PCA and DON treatment effectively attenuated this LPS-induced cognitive deficits. In addition to the behavioral improvements, both treatments significantly reduced the central levels of proinflammatory cytokine, interleukin-1β, and lipid peroxidation marker, malondialdehyde levels. Our findings suggest that PCA exerts neuroprotective effects against LPS-induced neuroinflammation and cognitive impairment in rats by plausible modulation of proinflammatory cytokines and oxidative stress pathways.