Alzheimer's disease (AD) is a progressive and irreversible neurodegenerative disease. Cholinesterase inhibitors (ChEIs) are commonly used for symptomatic treatment of neural transmission improvement in AD. Donepezil is a reversible and non-competitive ChEI which is clinically used for palliative treatment of AD. The aim of the present study was to investigate the destabilizing effect of donepezil loaded poly(lactic-co-glycolic acid)-block-poly (ethylene glycol) [PLGA-b-PEG] nanoparticles on fibril formation in vitro and the ability of these nanoparticles to cross blood brain barrier (BBB) using in vitro BBB model and the neuroprotective effects of free donepezil and donepezil loaded PLGA-b-PEG nanoparticles. Donepezil loaded PLGA-b-PEG nanoparticles were prepared with double emulsion method. Destabilizing effect of these donepezil loaded particles on the amyloid-beta fibril (A beta(1-40) and A beta(1-42)) formation was determined in vitro. Nanoparticles were found to have small particle size and have destabilizing effect on fibril formation. In vitro BBB model was successfully prepared. Nanoparticles showed the ability to cross the BBB and showed a controlled release profile in this system. IL-1 beta, IL-6, GM-CSF, TGF-beta, MCP-1 and TNF-alpha levels were found to be increased in both gene and protein expression levels in astrocytes incubated with amyloid fibrils in in vitro BBB model suggesting an increased inflammation. Free donepezil and donepezil loaded nanoparticle administration caused a significant dose-dependent decrease in both gene and protein expression levels of IL-1 beta, IL-6, GM-CSF and TNF-alpha. No significant changes were observed for TGF-beta and MCP-1.