Alzheimer's disease (AD) is the most prevalent form of neurodegenerative condition distinguished by the deposition of amyloid beta plaques and neurofibrillary tangles in the brain with a progressive decline of cognition abilities. Unfortunately, none of the existing treatments has the ability to cure the disease. The biggest challenge in drug development for AD is its obscurity pertaining to underlying pathophysiology. The endocannabinoid system (ECS) has recently emerged as a critical target through the inhibition of the enzyme fatty acid amide hydrolase (FAAH) which gives protective effects in the context of amyloidosis, which produce neuroinflammation in the AD brain. In quest of novel FAAH inhibitors, we developed a pharmacophore containing one hydrogen bond acceptor (1HBA) and two hydrophobic (HY) employing Discovery Studio version 2.0. The validated pharmacophore was used to mine the National Cancer Institute (NCI) database and this led to the retrieval of potential hits which were sorted based on Lipinski's rule of five, fit value, and estimated value. The interaction of the most potent hits with active binding sites of the FAAH was analyzed through the LibDock molecular docking algorithm. Finally, three hits (NCI80, NCI794, and NCI328) were chosen for in vitro FAAH enzyme-based assay followed by in vivo studies in mice for their anti-Alzheimer potential. The in vitro results indicated that all three hits (NCI80, NCI794 and NCI328) are active with IC50 values of 1.76, 2.14, and 2.10 nM. Oral administration of NCI80, NCI794, and NCI328 at a dose of 5 mg/kg significantly raised (p < 0.0001) the percentage of spontaneous alternation in Y-maze (79.21%, 70.90%, and 67.6%) and improved the recognition frequency in identifying the new object compared to the familiar one (81.29 +/- 3.09, 73.33 +/- 11.55, 72.63 +/- 1.91) in streptozotocin (STZ, 3 mg/kg, I.C.V) induced AD mice model. The oxidative stress, neuroinflammatory parameters evaluation, and gene expression analysis exhibited that the treatment with FAAH inhibitors reduced oxidative stress and neuroinflammation in streptozotocin-induced AD mice. Histopathological evaluation of hippocampal tissues also confirmed the neuroprotective effect of identified FAAH inhibitors. In silico pharmacokinetics analysis predicted the expected bioavailability levels with excellent lipophilicity, low fraction unbound values, and acceptable distribution for selected compounds. These findings underscore the potential usefulness of identified hits NCI80, NCI794, and NCI328 as potential FAAH inhibitors and thus can be useful in the treatment of Alzheimer's disease.