Trafficking through the secretory pathway is known to regulate the maturation of the APP‐cleaving secretases and APP proteolysis. The coupling of stress signaling and pathological deterioration of the brain in Alzheimer’s disease (AD) supports a mechanistic connection between endoplasmic reticulum (ER) stress and neurodegeneration. Consequently, small molecular chaperones, which promote protein folding and minimize ER stress, might be effective in delaying or attenuating the deleterious progression of AD. We tested this hypothesis by treating APPswePS1delta9 AD transgenic mice with the molecular chaperone phenylbutyric acid (PBA) for 14 months at a dose of 1 mg PBA g⁻¹ of body weight in the drinking water. Phenylbutyric acid treatment increased secretase‐mediated APP cleavage, but was not associated with any increase in amyloid biosynthesis. The PBA‐treated AD transgenic mice had significantly decreased incidence and size of amyloid plaques throughout the cortex and hippocampus. There was no change in total amyloid levels suggesting that PBA modifies amyloid aggregation or pathogenesis independently of biogenesis. The decrease in amyloid plaques was paralleled by increased memory retention, as PBA treatment facilitated cognitive performance in a spatial memory task in both wild‐type and AD transgenic mice. The molecular mechanism underlying the cognitive facilitation of PBA is not clear; however, increased levels of both metabotropic and ionotropic glutamate receptors, as well as ADAM10 and TACE, were observed in the cortex and hippocampus of PBA‐treated mice. The data suggest that PBA ameliorates the cognitive and pathological features of AD and supports the investigation of PBA as a therapeutic for AD.