NLRP3 inflammasome activation plays a key role in the development of diabetes-induced cognitive impairment. However, strategies to inhibit NLRP3 inflammasome activation remain elusive. Herein, we evaluated the impact of a walnut-derived peptide, TWLPLPR (TW-7), on cognitive impairment in high-fat diet/streptozotocin-induced type 2 diabetes mellitus (T2DM) mice and explored its underlying mechanisms in high glucose-induced HT-22 cells. In the Morris water maze test, TW-7 alleviated cognitive deficits in mice; this was confirmed at the level of synaptic structure and dendritic spine density in the mouse hippocampus using transmission electron microscopy and Golgi staining. TW-7 increased the expression of synaptic plasticity-related proteins and suppressed the NEK7/NLRP3 inflammatory pathway, as determined by western blotting and immunofluorescence analysis. The mechanism of action of TW-7 was verified in an HT-22 cell model of high glucose-induced insulin resistance. Collectively, TW-7 could regulate T2DM neuroinflammation and synaptic function-induced cognitive impairment by inhibiting NLRP3 inflammasome activation and improving synaptic plasticity.