Oxidative stress and neuroinflammation are highly relevant to the pathological processes of various neurodegenerative diseases including Alzheimer’s disease (AD). (+)-2-(1-hydroxyl-4-oxocyclohexyl) ethyl caffeate (HOEC), a novel 5-lipoxygenase inhibitor, was isolated from the whole plant of Incarvillea mairei var granditlora (Wehrhahn) Grierson. In this study, we investigated the protective effect of HOEC on hydrogen peroxide (H2O2) and lipopolysaccharide (LPS) -induced cytotoxicity and neuroinflammation in vitro and in vivo. MTT assay, LDH release assay, morphological observation and Hoechst 33342/PI dual staining followed by EIA, immunofluorescence staining and Western Blotting analysis were performed to elucidate the neuroprotective effect of HOEC. Treatment with HOEC at various concentrations prior to H2O2 exposure significantly enhanced cell viability, decreased LDH release, prevented cell morphologic changes and apoptosis. Instead of PGE2 reduction, HOEC markedly inhibited the production of LTB4 and suppressed the macrophage-mediated neurotoxicity. Western blotting and immunofluorescence staining showed that HOEC inhibited H2O2-induced p38 phosphorylation and NF-κB activation. Neuroprotective effect of HOEC was abolished by a p38 inhibitor. Further in vivo studies of LPS-induced neuroinflammation confirmed the anti-inflammatory effects of HOEC. These findings that HOEC protects SH-SY5Y cells from H2O2 and LPS-induced injury via arachidonic acid network modulation followed by p38 MAPK and NF-κB signaling, might make HOEC be considered as a therapeutic candidate for prevention and treatment of neurodegenerative diseases involving oxidative stress or/and inflammation.