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Numerous clinical studies show that besides respiratory symptoms, COVID-19 patients frequently undergo neurological and neuropsychiatric problems. However, effective treatments for these problems remain insufficient. LW-AFC, derived from traditional Chinese medicine Liuwei Dihuang decoction, is effective in improving cognitive and mental dysfunctions in many animal models. In this study, we aimed to investigate the impact of SARS-CoV-2 spike protein on the mouse nervous system, evaluate the beneficial effects of LW-AFC, and explore its underlying mechanisms. After a single intranasal administration of spike protein, mice showed a significant decline in motor performance from week 1, and this decline persisted until week 32. Three weeks after administration, anxiety-like behaviors and spatial memory deficits appeared but returned to normal by week 32. It is suggested that spike protein causes dynamic neurological and psychiatric impairments in mice, which is consistent with clinical findings. LW-AFC reversed these effects, enhancing motor performance, improving spatial memory, and alleviating anxiety. LW-AFC increased the number of NeuN-positive cells and decreased the number of Iba-1-positive cells. Additionally, LW-AFC reduced the levels of pro-inflammatory cytokines IL-6 and TNF-α, increased ATP levels, and enhanced the activity of mitochondrial respiratory chain complex I. These findings indicate that LW-AFC holds great potential as a therapeutic option for SARS-CoV-2-induced neuropsychiatric impairments.