Artemisia capillaris Thunberg is a medicinal plant used as a traditional medicine in many cultures. It is an effective remedy for liver problems including hepatitis. Recent pharmacological reports have indicated that Artemisia species can exert various neurological effects. Previously, we reported a memory-enhancing effect of Artemisia species. However, the mechanisms underlying the neuroprotective effect of A. capillaris (AC) are still unknown. In the present study, we investigated the effect of an ethanol extract of AC on ischemic brain injury in a mouse model of transient forebrain ischemia. The mice were treated with AC for seven days, beginning one day before induction of transient forebrain ischemia. Behavioral deficits were investigated using the Y-maze. Nissl and Fluoro-jade B staining were used to indicate the site of injury. To determine the underlying mechanisms for the drug, we measured acetylcholinesterase activity. AC (200 mg·kg −1) treatment reduced transient forebrain ischemia-induced neuronal cell death in the hippocampal CA1 region. The AC-treated group also showed significant amelioration in the spontaneous alternation of the Y-maze test performance, compared to that in the untreated transient forebrain ischemia group. Moreover, AC treatment showed a concentration-dependent inhibitory effect on acetylcholinesterase activity in vitro. Finally, the effect of AC on forebrain ischemia was blocked by mecamylamine, a nonselective nicotinic acetylcholine receptor antagonist. Our results suggested that in a model of forebrain ischemia, AC protected against neuronal death through the activation of nicotinic acetylcholine receptors.