In the recent research, it has been discovered that red mold rice has the potential to ameliorate the symptom of Alzheimer’s disease (AD), by the functional factor such as monacolin K, γ-aminobutyric acid (GABA), dimerumic acid, ankaflavin and monascin. Using dioscorea as substrate for Monascus purpureus fermentation, it can produce higher amount of functional ingredients, ankaflvin and monascin. In this study, we investigate the effect of red mold dioscorea (RMD) to ameliorate Alzheimer’s disease pathophysiology. Using 4 month-old Alzheimer’s disease transgenic mice J20 feeding with RMD for two months, we found that J20 mice fed with RMD have better learning and memory ability then the control group in behavior test such as passive avoidance and Morris water maze. Analyzing the symptoms related to AD, we found that in the brain of J20 mice fed with RMD, there’s a significant decrease in the amount of Aβ1-40, 1-42 and enzyme activity of acetylcholinesterase. After confirming the effect of RMD in AD, we use positive control, rosiglitazone group as reference to investigate the mechanism of RMD to ameliorate AD. In decreasing p-tau level, activating the CD36 marker gene expression which related to microglia clearing Aβ, decreasing gene expression of γ-secretase, we found that RMD has the same effect as rosiglitazone, a PPARγ agonist. According to the previous research that pigments in RMD, monascin and ankaflavin, have the characteristic of PPARγ agonist combined with our results, we assumed that one of the mechanism of RMD to ameliorate AD may through monascin and ankaflavin, as PPAR γagonist rosiglitazone, activate PPARγ to effect it.