Neonatal hypoxia-ischemia (HI) is one of the main factors that cause neonatal severe neurologic impairment and death. Shown by a large number of studies, caspase-1 plays a significant effect in diseases such as hypoxic-ischemic brain damage (HIBD) and may be a key component of the protein complex that initiates PANoptosis. VX-765, an inhibitor of caspase-1, exerts a potential neuroprotective effect in traumatic brain injury. However, it is unknown whether the administration of VX-765 has neuroprotective effects on neonatal rats that suffered HIBD, and if so, the underlying mechanisms are also still unknown. In the present study, we found that treatment with VX-765 (50 mg/kg, i.p.) significantly ameliorated the impairment of locomotor coordination functions and myodynamia as well as the spatial learning and memory in neonatal rats subjected with HIBD. These behavior improvements were attributed to VX-765 reducing infarct volumes and neuronal loss in the CA1, CA3 region of hippocampus, and deeper layers of the cortex in HIBD rats. Moreover, the enzyme-linked immunosorbent assay showed that VX-765 obviously decreased the production of neuroinflammatory factors including TNF-α, IL-1β, and IL-6. Importantly, we identified HI promoted PANoptosis activation in vivo and in vitro, and VX-765 obviously suppressed PANoptosis activation. Finally, we demonstrated that VX-765 treatment reversed neuronal injury induced by oxygen-glucose deprivation (OGD). Taken together, these results suggest that VX-765 protects the neurons against damage by suppressing neuroinflammation and PANoptosis activation, thereby improving locomotor coordination and cognitive impairments in neonatal HIBD rats, indicating that VX-765 may be an underlying therapeutic drug for the clinical treatment of hypoxic-ischemic encephalopathy (HIE).