ABSTRACT Cyclophosphamide (CP) is an anticancer drug, but its long‐term use is commonly associated with neurotoxicity. We investigated the neuroprotective effects of a novel polyherbal formulation (PHF) on CP‐induced neurotoxicity in SH‐SY5Y cells and its mechanism of action. PHF showed strong antioxidant action and mitigated CP‐induced SH‐SY5Y toxicity by significantly ( p < 0.05–0.001) increasing the cell viability by 51.44%, 71.28%, and 98.43% at doses 250, 500, and 1000 µg/mL, respectively. CP‐induced oxidative stress in SH‐SY5Y cells was associated with a significant ( p < 0.001) decline in DPPH (by 40.26%), ABTS (by 44.98%), and CUPRIC (by 68.95%) activities. Interestingly, PHF prevented lipid peroxidation, ROS and apoptosis, and enhanced MMP level and the antioxidant status in SH‐SY5Y cells. The phytocompounds detected in PHF showed strong binding affinity with CP‐activator enzymes (CYP2D6 and CYP2C19) and oxidative stress‐related markers (AChE and GST), which support the in vitro findings. PHF could be useful in the prevention/treatment of chemotherapy‐associated neurodegenerative disorders.