Sepsis-associated encephalopathy (SAE) is characterized by high incidence and mortality rates, with limited treatment options available. The underlying mechanisms and pathogenesis of SAE remain unclear. Annexin A1 (ANXA1), a membrane-associated protein, is involved in various in vivo pathophysiological processes. This study aimed to explore the neuroprotective effects and mechanisms of a novel bioactive ANXA1 tripeptide (ANXA1sp) in SAE. Forty Sprague-Dawley rats were randomly divided into four groups (n?=?10 each): control, SAE (intraperitoneal injection of lipopolysaccharide), vehicle (SAE?+?normal saline), and ANXA1sp (SAE?+?ANXA1sp) groups. Changes in serum inflammatory factors (interleukin-6 [IL-6], tumor necrosis factor-α [TNF-α]), hippocampal reactive oxygen species (ROS), mitochondrial membrane potential (MMP), and adenosine triphosphate (ATP) levels were measured. The Morris water maze and Y maze tests were used to assess learning and memory capabilities in the rats. Further, changes in peroxisome proliferator-activated receptor-gamma (PPAR-γ) and apoptosis-related protein expression were detected using western blot. The IL-6, TNF-α, and ROS levels were significantly increased in the SAE group compared with the levels in the control group. Intraperitoneal administration of ANXA1sp led to a significant decrease in the IL-6, TNF-α, and ROS levels (p?