Pancreatic encephalopathy (PE) is a frequent complication of acute pancreatitis. This study explored the mechanism of taraxasterol (TAS) in PE treatment by inhibiting pyroptosis via L1 cell adhesion molecule (L1CAM) up-regulation. PE rat models were established and treated with TAS, NLRP3 activator, and sh-L1CAM lentivirus. Serum amylase and lipase activities and Serum, hippocampus, and amygdala IL-18 and IL-1β levels were determined by ELISA, followed by TUNEL and HE staining. Rat nerve injury was evaluated by modified Neurological Severity Score (mNSS). Spontaneous behaviors, learning, memory, and emotions in rats were separately assessed by open field, new object recognition, tail suspension, and forced swimming tests. Microstructures of hippocampal CA1 region and amygdala were observed. NLRP3 + GSDMD + cells, pyroptosis markers, L1CAM, and myelin basic protein (MBP) were detected. PE rat model displayed elevated serum amylase and lipase activities and IL-18 and IL-1β levels, increased mNSS, shortened moving distance, reduced discrimination rate, prolonged immobility time, pathological damage in hippocampal CA1 region and amygdala, increased TUNEL-positive and NLRP3 + GSDMD + cells, raised NLRP3, cleaved caspase-1, GSDMD-N, IL-1β and IL-18 levels, and reduced L1CAM and MBP levels. TAS mitigated behavioral deficits and brain injury and curbed NLRP3-mediated pyroptosis in hippocampal CA1 region and amygdala in PE rats. NLRP3 activation partly averted the beneficial impacts of TAS on PE rats. TAS suppressed nerve cell pyroptosis and facilitated myelin regeneration by up-regulating L1CAM. L1CAM silencing partially abrogated TAS's effect on behavioral deficits and brain injury in PE rats. TAS treated PE by inhibiting pyroptosis via L1CAM up-regulation. SUPPLEMENTARY INFORMATION: The online version contains supplementary material available at 10.1007/s10616-025-00721-x.