This study examined the short- and long-term neuroprotective and analgesic activity of honokiol (a naturally occurring lignan isolated from Magnolia) on developing brains in neonates exposed to inflammatory pain, known to cause neuronal cell death. Postnatal day 4 (P4) neonatal rat pups were subjected to intraplantar formalin injection to four paws as a model of severe neonatal pain. Intraperitoneal honokiol (10 mg/kg) or corn oil vehicle control was administered 1 h prior to formalin insult, and animals were maintained on honokiol through postnatal day 21 (P21). Behavioral tests for stress and pain were performed after the painful insult, followed by morphological examinations of the brain sections at P7 and P21. Honokiol significantly attenuated acute pain responses 30 min following formalin insult and decreased chronic thermal hyperalgesia later in life. Honokiol-treated rats performed better on tests of exploratory behavior and performed significantly better in tests of memory. Honokiol treatment normalized hippocampal and thalamic c-Fos and hippocampal alveus substance P receptor expression relative to controls at P21. Together, these findings support that (1) neonatal pain experiences predispose rats to the development of chronic behavioral changes and (2) honokiol prevents and reduces both acute and chronic pathological pain-induced deteriorations in neonatal rats.