The current study explored the chemical composition and biological activities of the essential oil and ethanol extract of Salvia lanigera collected from Libya. The ethanol extract obtained from the wild growing S. lanigera was evaluated for the chemical composition via high-performance liquid chromatography with diode-array detection (HPLC-DAD), which demonstrated phenolic and flavonoid contents. A total of 17 compounds, representing phenolic and flavonoid derivatives, have been identified. Besides, gas chromatography-mass spectrometry (GC-MS) analysis of the essential oil obtained from S. lanigera aerial parts identified 24 compounds, accounting for 99.33% of the oil, and the major components were characterized to be 1,8-cineole (27.28%), camphor (25.82%), α-pinene (7.71%), and α-terpineol (7.67%). The results indicated that the oil and ethanol extract exhibited marked radical scavenging capacity toward DPPH (2,2-diphenyl-1-picrylhydrazyl), with IC values of 0.1337 and 0.6331 µg/mL, respectively. Further, the oil and ethanol extract demonstrated potent activity against ABTS (2,2'-azino-bis(3-ethylbenzothiazoline-6-sulfonic acid)), with IC values of 0.17 and 0.0501 µg/mL, respectively. Moreover, S. lanigera oil inhibited more than 76% of the acetylcholinesterase enzyme activity, with an IC value of 144 ± 1.04 µg/mL. The in vitro data showed that the ethanol extract has potential antidiabetic properties toward the α-glucosidase enzyme with an IC value of 124.6 ± 1.07 µg/mL. Regarding the nature of measurement, assay conditions, and ligand-specific factors such as solubility and stability, we demonstrated a correlation between the IC values and in-silico results for antidiabetic assays, where chlorogenic and rosmarinic acids recorded the highest docking scores of -9.4 and - 8.9 kcal/mol, respectively. However, this correlation was not observed in the anti-cholinesterase assay. Further in vivo investigations are essential to confirm the in vitro results of S. lanigera oil and ethanolic extract. This study helps elucidate the potential therapeutic applications of these compounds and their effectiveness in managing diabetes and neurodegenerative disorders.