The present study focused to determine the neuroprotective effects of terpenoids in streptozotocin & nicotinamide-induced type-2 diabetes in rats. The in silico studies were carried out for 68 terpenoids using AutoDock 4.2. The in vitro cholinestrerase, α-amylase enzyme inhibitory assays were perfomed using standard procedures. For in vivo neuroprotective studies, male wistar rats were separated into five groups and each group comprised of six animals. Treatment groups were received low dose and high dose α-Bisabolol 100 and 200 mg/kg respectively, and the standard groups received rivastigmine 2 mg/kg, p.o. and metformin group 100 mg/kg, p.o. for 30 consecutive days. Administration of streptozotocin (45 mg/kg, i.p.) and nicotinamide (110 mg/kg, i.p.)-induced the type 2 diabetes in all groups except the control. The behavioural assessments such as Morris water maze, and open field test were performed and biochemical parameters such as acetylcholinesterase levels and enzymatic antioxidants and reduced glutathione level were estimated from brain homogenates. Treatment of diabetic rats with α-Bisabolol was lowered blood glucose level, improved spatial recognition memory in behavioural assessments in a concentration dependent manner. It can be concluded that α-Bisabolol could act as a potential drug candidate in the management of diabetic Alzheimer’s disease.Copyright © 2023. Published by Elsevier B.V.