Type 2 diabetes mellitus (T2DM) markedly impairs human health. During T2DM development, some patients experience cognitive dysfunction and behavioral deficits, which are characterized by neuronal injury and memory loss. It has been reported that the incidence of dementia in middle-aged and elderly patients with diabetes is significantly higher than that in normal elderly patients. Currently, the pathogenesis of cognitive dysfunction in diabetes remains unknown, and there is no standard or specific method to diagnose the disease in clinical practice. Evidence has shown that fish oil (FO) can alleviate depressive-like behaviors by attenuating neuroinflammation in a rat model, and improve cognitive dysfunction by inhibiting apoptosis. Therefore, it is reasonable to speculate that FO may reduce cognitive impairment by attenuating neuroinflammation in diabetic rats. In the present study, we investigated the effects of FO supplementation on cognitive dysfunction in a streptozotocin-induced diabetic rat model. FO administration for 10 weeks improved spatial learning and memory as evaluated by performance in the Morris water maze (MWM). Besides, FO significantly improved the morphology of neurons in the hippocampus and cortex of diabetic rats and reduced the neuronal nuclear condensation. Moreover, FO decreased the mRNA expression of IL-1β, IL -6, and TNF-α and increased the mRNA expression of IL-4 and IL-10 in the cortex and hippocampus. FO also attenuated the brain inflammatory cascade and simultaneously reduced diabetes-induced oxidative stress. In addition, FO increased the protein expression of Nrf2 and HO-1 in cortex and hippocampus of diabetic rats. These results provide a novel horizon for the study of neuroprotective effect of FO and further clarify the connections among inflammation, oxidative stress and diabetes-induced cognitive impairment.