Stroke is the second leading cause of death worldwide, and currently, there is no effective neuroprotective agent available for its treatment. Though apolipoprotein E (ApoE) showed potential as a neuroprotective agent for CNS disorders, however, its large size limits its clinical application. To overcome this issue, smaller ApoE-mimetic peptides that mimic the biological functions of ApoE have been developed. In this study, we designed and characterized a novel ApoE-mimetic peptide, ApoEFrag, and explored its neuroprotective potential in experimental stroke models. ApoEFrag was evaluated for its ability to interact with oxidized lipids and lack of self-aggregation potential. In the in vitro cerebral ischemia model, ApoEFrag demonstrated neuroprotection against glutamate-induced neuronal damage in SH-SY5Y cells by maintaining mitochondrial health and reducing reactive oxygen species (ROS) levels. To confirm ApoEFrag's neuroprotective potential, ApoEFrag was investigated in middle cerebral artery occlusion (MCAO) induced ischemic stroke in rats. ApoEFrag administration significantly reduced infarct size, improved neurological function, and lowered mortality. ApoEFrag exhibited anti-inflammatory effects, reduced astrocyte activation and apoptosis, and promoted neurogenesis. Overall, ApoEFrag shows promising neuroprotective effects and could be a potential therapeutic approach for the treatment of stroke.