Formononetin is a bioactive non-steroidal polyphenol found in a variety of plants. In this study we evaluated the effects of formononetin on neuroinflammation in LPS-stimulated BV2 microglia. Results showed that formononetin significantly reduced the production of TNF-α, IL-6 and IL-1β, nitrite and PGE2, as well as protein levels of iNOS and COX-2. Reporter gene assays showed that formononetin produced inhibition of NF-κB luciferase activity in HEK293 cells stimulated with TNF-α. Immunoblotting experiments revealed an inhibition of IKKα phosphorylation, with the resultant attenuation of phosphorylation and degradation of IκBα following LPS stimulation. Formononetin also produced an inhibition of nuclear translocation and DNA binding by NF-κB following LPS stimulation. RNAi experiments showed that transfection of BV2 microglia with ERβ siRNA resulted in the loss of anti-inflammatory action of formononetin. MTT assay and MAP2 immunoreactivity experiments showed that formononetin produced significant neuroprotective activity by preventing BV2 microglia conditioned media-induced toxicity to HT22 neurons. Investigations on the effect of formononetin on MCF7 breast cancer cells revealed that, while the compound significantly increased ER-luciferase activity, its effects on proliferation were modest. This study has established that formononetin inhibits neuroinflammation by targeting NF-κB signalling pathway in BV2 microglia, possibly through mechanisms involving ERβ. Formononetin appears to modulate ERβ in MCF7 breast cancer cells with limited proliferative effect. Formononetin could therefore serve as a chemical scaffold for the development of novel compounds which have selective neuroprotective actions in the brain.