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Abstract Glial cell-mediated neuroinflammation and neuronal attrition are highly correlated with cognitive impairment in Alzheimer’s disease. YKL-40 is a secreted astrocytic glycoprotein that serves as a diagnostic biomarker of Alzheimer’s disease. High levels of YKL-40 are associated with either advanced Alzheimer’s disease or the normal aging process. However, the functional role of YKL-40 in Alzheimer’s disease development has not been firmly established. In a 5xFAD mouse model of Alzheimer’s disease, we observed increased YKL-40 expression in the cerebrospinal fluid of 7-month-old mice and was correlated with activated astrocytes. In primary astrocytes, Aβ1-42 upregulated YKL-40 in a dose-dependent manner and was correlated with PI3-K signaling pathway activation. Furthermore, primary neurons treated with YKL-40 and/or Aβ1-42 resulted in significant synaptic degeneration, reduced dendritic complexity, and impaired electrical parameters. More importantly, astrocyte-specific knockout of YKL-40 over a period of 7 days in symptomatic 5xFAD mice could effectively reduce amyloid plaque deposition in multiple brain regions. This was also associated with attenuated glial activation, reduced neuronal attrition, and restored memory function. These biological phenotypes could be explained by enhanced uptake of Aβ1-42 peptides, increased rate of Aβ1-42 degradation and acidification of lysosomal compartment in YKL-40 knockout astrocytes. Our results provide new insights into the role of YKL-40 in Alzheimer’s disease pathogenesis and demonstrate the potential of targeting this soluble biomarker to alleviate cognitive defects in symptomatic Alzheimer’s disease patients.