The present invention relates to a composition for preventing or treating dementia comprising toosendanin or Chinaberry tree (Melia azedarach, Melia toosendan) extract as an active ingredient and more particularly a pharmaceutical composition of the present invention comprising chinaberry tree (Melia azedarach, Melia toosendan) extract, toosendanin, or a pharmaceutically acceptable salt thereof as an active ingredient, a use of the composition, and a method for preventing/treating dementia using the composition are very effective in prevention or treatment of dementia. Especially, the composition, the use, or the method, according to the present invention, are effective in the inhibition of Aβ production and induction of the production promotion of APPα showing a protective effect of a nerve cell thereby having excellent property of preventing and treating dementia such as Alzheimers disease.