Accumulating clinical and epidemiological evidence indicates a close relationship between diabetes mellitus and dementia. The ginsenoside compound K (CK) has been reported to ameliorate diabetes mellitus and confer protection to the central nervous system. In this study, we investigated whether CK could improve memory impairment and cognitive dysfunction in diabetic db/db mice. Firstly, we found that CK treatments significantly improved behavioral impairment and cognitive dysfunction based on Morris water maze, Y-maze, and fear conditioning tests. Besides, CK decreased the fasting glucose level, increased lipid metabolism, and ameliorated glucose tolerance, insulin sensitivity, and dyslipidemia in diabetic db/db mice. In addition, CK treatments alleviated oxidative stress and inhibited the inflammatory response in hippocampal tissue. Further investigations showed that CK treatments inhibited the NLRP3 inflammasome pathway, as evidenced by the declined expression of TXNIP, NLRP3 inflammasomes, ASC, cleaved caspase-1, and mature IL-1β in hippocampal tissues. Moreover, CK treatments alleviated ER stress via down-regulating the level of BiP, CHOP, p-PERK, p-IRE1α and ATF6 in the hippocampus of db/db mice. These results suggest that CK improves memory and cognitive dysfunction, possibly by ameliorating glucose tolerance, insulin sensitivity, and dyslipidemia, suppressing oxidative stress and inflammatory response and modulating the NLRP3 inflammasome pathway and ER stress.