Major depressive disorder (MDD) is a debilitating human health condition characterized by mood swings and is associated with a high probability of suicide attempts. Several studies have reported a role of neuroinflammation in MMD, yet the efficacy of natural drug substances on neuroinflammation-associated depression has not been well-investigated. The present study examined the neuroprotective effects of carvacrol on lipopolysaccharide (LPS)-induced neuroinflammation, depression, and anxiety-like behavior. Methods Male Sprague Dawley rats were divided into two experimental cohorts to determine the effects and the effective dose of carvacrol (whether 20 mg/kg or 50 mg/kg), and further demonstrate the mechanism of action of nuclear factor E2-related factor (Nrf2) in depression. Results We found marked neuronal alterations in the cortex and hippocampus of LPS-intoxicated animals that were associated with higher inflammatory cytokine expression such as cyclooxygenase (COX2), tumor necrosis factor-alpha (TNF-α), and c-Jun N-terminal kinase (p-JNK). These detrimental effects exacerbated oxidative stress, as documented by a compromised antioxidant system due to high lipid peroxidase (LPO). Carvacrol (20 mg/kg) significantly reverted these changes by positively modulating the antioxidant gene Nrf2, a master regulator of the downstream antioxidant pathway. To further investigate the role of Nrf2, an inhibitor of Nrf2 called all-trans retinoic acid (ATRA) was used, which further exacerbated LPS toxicity with a higher oxidative and inflammatory cytokine level. To further support our notion, we performed virtual docking of carvacrol with the Nrf2-Keap1 target and the resultant drug-protein interactions validated the in vivo findings. Conclusion Collectively, our findings suggest that carvacrol (20 mg/kg) could activate the endogenous master antioxidant Nrf2, which further regulates the expression of downstream antioxidants, eventually ameliorating LPS-induced neuroinflammation and neurodegeneration.