Increasing studies suggest that inflammatory processes in the central nervous system mediated by microglial activation plays an important role in numerous neurodegenerative diseases. Development of planning for microglial suppression is considered a key strategy in the search for neuroprotection. Paeonol is a major phenolic component of Moutan Cortex, widely used as a nutrient supplement in Chinese medicine. In this study, we investigated the effects of paeonol on microglial cells stimulated by inflammagens. Paeonol significantly inhibited the release of nitric oxide (NO) and the expressions of inducible nitric oxide synthase (iNOS) and cyclooxygenase-2 (COX-2). Treatment with paeonol also reduced reactive oxygen species (ROS) production and inhibited an ATP-induced increased cell migratory activity. Furthermore, the inhibitory effects of neuroinflammation by paeonol were found to be regulated by phosphorylated adenosine monophosphate-activated protein kinase-α (AMPK-α) and glycogen synthase kinase 3 α/β (GSK 3α/β). Treatment with AMPK or GSK3 inhibitors reverse the inhibitory effect of neuroinflammation by paeonol in microglial cells. Furthermore, paeonol treatment also showed significant improvement in the rotarod performance and microglial activation in the mouse model as well. The present study is the first to report a novel inhibitory role of paeonol on neuroinflammation, and presents a new candidate agent for the development of therapies for inflammation-related neurodegenerative diseases.