Multiple Sclerosis (MS) is a progressive neurodegenerative disease with clinical signs of neuroinflammation and the central nervous system's demyelination. Numerous studies have identified the role of the Janus kinase (JAK)/signal transducer and activator of transcription (STAT) overexpression and the low level of peroxisome proliferator-activated receptor-gamma (PPAR-γ) in MS pathogenesis. Guggulsterone (GST), an active component derived from 'Commiphora Mukul,' has been used to treat various diseases. Traditional uses indicate that GST is a suitable agent for anti-inflammatory action. Therefore, we assessed the therapeutic potential of GST (30 and 60 mg/kg) in ethidium bromide (EB) induced demyelination in experimental rats and investigated the molecular mechanism by modulating the JAK/STAT and PPAR-γ receptor signaling. Wistar rats were randomly divided into six groups (n = 6). EB (0.1%/10 μl) was injected selectively in the intracerebropeduncle (ICP) region for seven days to cause MS-like manifestations. The present study reveals that long-term administration of GST for 28 days has a neuroprotective effect by improving behavioral deficits (spatial cognition memory, grip, and motor coordination) associated with lower STAT-3 levels. While elevating PPAR-γ and myelin basic protein levels in rat brains are consistent with the functioning of both signaling pathways. Also, GST modulates the neurotransmitter level by increasing Ach, dopamine, serotonin and by reducing glutamate. Moreover, GST ameliorates inflammatory cytokines (TNF, IL-1β), and oxidative stress markers (AchE, SOD, catalase, MDA, GSH, nitrite). In addition, GST prevented apoptosis, as demonstrated by the reduction of caspase-3 and Bax. Simultaneously, Bcl-2 elevation and the restoration of gross morphology alterations are also recovered by long-term GST treatment. Therefore, it can be concluded that GST may be a potential alternative drug candidate for MS-related motor neuron dysfunctions.