Neuroinflammation is a brain pathology that involves the expression of high levels of pro-inflammatory mediators, including tumor necrosis factor-alpha (TNF-α). An excessive TNF-α expression could result in neuronal cell death and subsequently lead to neurodegeneration. Auricularia polytricha (AP; an edible mushroom) has been reported as a rich source of ergosterol with several medicinal benefits. The current study reports on the neuroprotective effects of AP extracts and ergosterol against the TNF-α-induced HT-22 hippocampal cell injury. The hexane extract of AP (APH) demonstrated a neuroprotective effect against the TNF-α-induced HT-22 cell toxicity, taking place through the activation of the antioxidant pathway. Ergosterol, a major component of APH, could attenuate the toxicity of TNF-α on HT-22 cells, by increasing the expression of a major antioxidant enzyme (superoxide dismutase-1) and by facilitating the scavenging of reactive oxygen species through antioxidant signaling. Moreover, an antibody array was performed to screen the possible molecular targets of ergosterol in HT-22 cells exposed to TNF-α. Based on the antibody array, the phospho-Akt was activated in the presence of ergosterol, and this finding was also supported by Western blotting analysis. Furthermore, ergosterol inhibited the transcriptional expressions of the glutamate ionotropic receptor N-methyl-D-aspartate (NMDA) type subunit 2B gene (Grin2b) through an early growth response-1 (EGR-1) overexpression in TNF-α-treated HT-22 cells. Our findings suggest that a novel therapeutic effect of AP and ergosterol against neuroinflammation, that it is mediated by an NMDA gene modulation occurring through the overexpression of the EGR-1 transcription factor.