Honokiol is a natural active compound extracted from Chinese herbal medicine, Magnolia officinalis. In this study, the role of honokiol in the development of carotid artery atherosclerotic lesions was evaluated in an ApoE-/- mouse model fed with a normal diet (ND) or a Western-type diet (WD) for ten weeks. After first two weeks, a perivascular collar was surgically placed on the right common carotid arteries of the mice. Then, WD-fed mice were intraperitoneally injected with honokiol (10 or 20 mg/kg) or administrated with 10 mg/kg atorvastatin calcium by gavage once a day for eight weeks. After that, the right common carotid arteries were excised for further experiments. The result showed that honokiol substantially inhibited the development of atherosclerotic lesions. Furthermore, honokiol downregulated the expression of pro-inflammatory markers, like tumor necrosis factor-α, interleukin (IL)-6, and IL-1β. Additionally, honokiol treatment decreased reactive oxygen species level and enhanced superoxide dismutase activity. Nitric oxide level, inducible nitric oxide synthase (iNOS) expression, and aberrant activation of nuclear factor-κB pathway were also significantly inhibited by honokiol treatment. Together, these findings suggest that honokiol protects against atherosclerotic plaque formation in carotid artery, and may be an effective drug candidate for the treatment of carotid artery atherosclerotic stenosis.