The search for novel pharmacotherapy from medicinal plants for psychiatric illnesses has progressed significantly from the past few decades and their therapeutic potential has been assessed in a variety of animal models. The aim of our study was to screen one such plant, Panax quinquefolium (PQ), with significant neuroactive properties for its antipsychotic potential. A graded dose study with PQ at 12.5-200 mg/kg, p. o. showed differential effects against the ketamine induced hyperactivity in the Digiscan animal activity monitor. Nevertheless at 100 mg/kg, p.o., PQ blocked ketamine induced memory impairment in the passive avoidance paradigm. In the chronic studies, PQ reduced the ketamine induced enhanced immobility in the forced swim test and did not show extra-pyramidal side effects in bar test and wood block test of catalepsy. These behavioural effects were compared with standard drugs haloperidol and clozapine. Further PQ reduced DA and 5-HT content after chronic treatment, but not after acute administration. In addition, PQ extract reduced acetylcholinesterase activity and nitrate levels, however increased glutamate levels in hippocampus. Overall our findings suggest that PQ possess antipsychotic like properties, which may leads to future studies with its specific constituents which may particularly be beneficial in predominant negative and cognitive symptoms of schizophrenia.