Formaldehyde, as a frequently used compound in many applications, crosses the blood-brain barrier and leads to hippocampal cell death and memory impairment. This study investigates the effects of ethanolic extract of Matricaria chamomilla (MC) on passive avoidance learning induced by damaged hippocampal cells and evaluates the antioxidant traits of MC. The male Wistar rats were divided into six (6 in each) groups: control (10 mg/kg normal saline), 200 (200 mg/kg MC extract), 500 (500 mg/kg MC extract), F (10 mg/kg formaldehyde), F200 (10 mg/kg formaldehyde and 200 mg/kg MC extract), and F500 (10 mg/kg formaldehyde and 500 mg/kg MC extract). Shuttle box assay was used for evaluation of passive avoidance learning. The apoptosis rate of hippocampal tissue, malondialdehyde (MDA) free radicals, and total antioxidant capacity was evaluated to determine the positive effect of the ethanolic extract of MC. We found that the ethanolic extract of MC reduced the cell death, time spent in a dark room, and MDA free radicals in the hippocampus, leading to increased total antioxidant capacity in this region. In conclusion, the ethanolic extract of MC could ameliorate formaldehyde-induced memory damage through decreasing cell death and MDA activity of the hippocampal region and increasing total antioxidant capacity.