This study explored the curative effect and underlying mechanisms of a traditional Chinese medicine compound prescription, Bushen-Yizhi formula (BSYZ), in ibotenic acid (IBO)-induced rats. Morris water maze and novel object recognition tests showed that BSYZ significantly improved spatial and object memory. Brain immunohistochemistry staining showed that BSYZ significantly up-regulated expression of choline acetyltransferase (ChAT) and nerve growth factor (NGF) in the hippocampus and cortex. The protein tyrosine kinase high-affinity receptor TrkA was slightly increased in the hippocampus and cortex, and significantly enhanced in the nucleus basalis of Meynert (NBM) after BSYZ intervention. The immunoreactivity of the p75 low-affinity receptor in BSYZ-treated rats was significantly strengthened in the cortex. Similar expression trends of nerve growth factor (NGF), TrkA, and p75 mRNA were observed in the hippocampus and cortex. Additionally, BSYZ reversed IBO-induced disorders of acetylcholine (ACh) levels, ChAT, and cholinesterase (ChE) in the cortex, which was consistent with the changes in mRNA levels of ChAT and acetylcholinesterase (AChE). Expression of ChAT and AChE proteins and mRNA in the hippocampus was up-regulated, whereas the apoptosis-relative protein cleaved caspase-3 was decreased after administration of BSYZ. Moreover, changes in cell death were confirmed by histological morphology. Thus, the results indicated that the BSYZ formula could ameliorate memory impairments in IBO-induced rats, and it exerted its therapeutic action probably by modulating cholinergic pathways, NGF signaling, and anti-apoptosis. Overall, it is suggested that the BSYZ formula might be a potential therapeutic approach for the treatment of Alzheimer's disease (AD) and other cholinergic impairment-related diseases.