Tao-Hong-Si-Wu decoction (TSD) as a traditional chinese medicine (TCM) has been developed to treat thrombotic diseases for hundreds of years, and vascular dementia (VD) is a cognitive dysfunction syndrome caused by cerebral embolism. In this study, the protective effect of TSD on memory impairment and brain damage in rat model of VD induced by middle cerebral artery occlusion (MCAO) was investigated. The study showed that rats in MCAO treatment with TSD for 14 days significantly improved behavioral function, increased densities of neuron, and induced angiogenesis in the brain compared with model rats. TSD also adjusted the neurotransmitter levels, reduced the content of endothelin-1 (ET-1), and induced the activities of vascular endothelial growth factor (VEGF) in hippocampus. Moreover, the immunohistochemical staining and western blotting results also revealed that TSD decreased apoptosis via upregulated B-cell lymphoma-2 (Bcl-2)/Bcl-2 associated X protein (Bax) ratio. These results demonstrated TSD possesses neuroprotective and antidementia properties by preventing the loss of neural cells, adjusting brain neurotransmitter, promoting cerebral blood circulation, and decreasing apoptosis. These results suggested that TSD might be developed as an effective drug for the prevention of VD.