Background/Aims: The activation of cannabinoid receptor 2 (CB2) has the beneficial effect of reducing neuroinflammatory response in the treatment of Alzheimer's disease (AD) and is suggested to trigger the peroxisome proliferator-activated receptor-γ (PPARγ) pathway; agonists of both receptors improve AD. Recently, the plant metabolite β-caryophyllene was shown to selectively bind to CB2 receptor and act as a full agonist. Methods: In this study, we examined the anti-inflammatory effect of β-caryophyllene in a transgenic APP/PS1 AD model and analyzed whether this effect was mediated by CB2 and PPARγ. Results: β-Caryophyllene, given orally, prevented cognitive impairment in APP/PS1 mice, and this positive cognitive effect was associated with reduced β-amyloid burden in both the hippocampus and the cerebral cortex. Moreover, β-caryophyllene reduced astrogliosis and microglial activation as well as the levels of COX-2 protein and the mRNA levels of the proinflammatory cytokines tumor necrosis factor-α and interleukin-1β in the cerebral cortex. The use of the CB2 antagonist AM630 or the PPARγ antagonist GW9662 significantly reversed the protective effects of β-caryophyllene on APP/PS1 mice. Conclusion: These results demonstrate that the anti-inflammatory effect of the sesquiterpene β-caryophyllene involves CB2 receptor activation and the PPARγ pathway and suggest β-caryophyllene as an attractive molecule for the development of new drugs with therapeutic potential for the treatment of AD.