Melatonin has been known to affect a variety of astrocytes functions in many neurological disorders but its mechanism of action on neuroinflammatory cascade and alpha-7 nicotinic acetylcholine receptor (α7-nAChR) expression are still not properly understood. Present study demonstrated that treatment of C6 cells with melatonin for 24 hours significantly decreased lipopolysaccharide (LPS) induced nitrative and oxidative stress, expressions of cyclooxigenase-2 (COX-2), inducible nitric-oxide synthase (iNOS) and glial fibrillary acidic protein (GFAP). Melatonin also modulated LPS-induced mRNA expressions of α7-nAChR and inflammatory cytokine genes. Furthermore, melatonin reversed LPS-induced changes in C/EBP homologous protein 10 (CHOP), microsomal prostaglandin E synthase-1(mPGES-1) and phosphorylated p38 mitogen activated protein kinase (P-p38). Treatment with pyrrolidine dithiocarbamate (PDTC) inhibited α7-nAChR mRNA expression in LPS-induced C6 cells. Our findings explored anti-neuroinflammatory action of melatonin, which may suggests its beneficial roles in the neuroinflammation associated disorders.