Emerging evidence suggests that neuro-inflammation begins early and drives the pathogenesis of Alzheimer's disease (AD), and anti-inflammatory therapies are under clinical development. However, several anti-inflammatory compounds failed to improve memory in clinical trials, indicating that reducing inflammation alone might not be enough. On the other hand, neuro-inflammation is implicated in a number of mental disorders which share the same therapeutic targets. Based on these observations, we screened a batch of genes related with mental disorder and neuro-inflammation in a classical olfactory conditioning in an amyloid beta (Aβ) overexpression fly model. A Smoothened (SMO) mutant was identified as a genetic modifier of Aβ toxicity in 3-min memory and downregulation of SMO rescued Aβ-induced 3-min and 1-h memory deficiency. Also, Aβ activated innate inflammatory response in fly by increasing the expression of antimicrobial peptides, which were alleviated by downregulating SMO. Furthermore, pharmaceutical administration of a SMO antagonist LDE rescued Aβ-induced upregulation of SMO in astrocytes of mouse hippocampus, improved memory in Morris water maze (MWM), and reduced expression of astrocyte secreting pro-inflammatory factors IL-1β, TNFα and the microglia marker IBA-1 in an APP/PS1 transgenic mouse model. Our study suggests that SMO is an important conserved modulator of Aβ toxicity in both fly and mouse models of AD.