Background This study was conducted to evaluate the efficacy of the herbal formula PM012 on an Alzheimer's disease model, human presenilin 2 mutant transgenic mice (hPS2m), and also to evaluate the toxicity of PM012 in Sprague-Dawely rats after 4 or 26 weeks treatment with repeated oral administration. Methods Spatial learning and memory capacities of hPS2m transgenic mice were evaluated using the Morris Water Maze. Simultaneously, PM012 was repeatedly administered orally to male and female SD rats (15/sex/group) at doses of 0 (vehicle control), 500, 1,000 and 2,000 mg/kg/day for 4 or 26 weeks. To evaluate the recovery potential, 5 animals of each sex were assigned to vehicle control and 2,000 mg/kg/day groups during the 4-week recovery period. Results The results showed that PM012-treated hPS2m transgenic mice showed significantly reduced escape latency when compared with the hPS2m transgenic mice. The repeated oral administration of PM012 over 26 weeks in male and female rats induced an increase and increasing trend in thymus weight in the female treatment groups (main and recovery groups), but the change was judged to be toxicologically insignificant. In addition, the oral administration of the herbal medicine PM012 did not cause adverse effects as assessed by clinical signs, mortality, body weight, food and water consumption, ophthalmology, urinalysis, hematology, serum biochemistry, blood clotting time, organ weights and histopathology. The No Observed Adverse Effects Levels of PM012 was determined to be 2,000 mg/kg/day for both sexes, and the target organ was not identified. Conclusion These results suggest that PM012 has potential for use in the treatment of the Alzheimer's disease without serious adverse effects.