Abstract Background Neurological disorders are at epidemic levels in the world today. Various proteins are being targeted for the development of novel molecular therapeutics; however, no small‐molecule inhibitors have been discovered. Recent studies suggest that there are few molecules in clinical trials for various secretase (α, β, and γ), caspase, and calpain inhibitors. However, recently an emerging target was highlighted i.e. asparaginyl endopeptidase (AEP). This lysosomal cysteine protease cleaves the glycine‐rich C‐terminal to form an asparagine residue. In addition, the highly conserved and spatially close catalytic triad (Oδ1 ASN42 ‐Nε2 HIS148 ̴ 3.0Å) active site residue is Asn 42, His 148‐spacer‐Cys 189, which is responsible for proteolytic activity are also impacted by the cleavage of the C‐terminal region of AEP. Therefore, the current study focuses on screening, available small molecule databases for potential interactions with the active binding sites within the AEP binding pocket for inhibiting its proteolytic activity and restoring neuronal damage. Method Various online available CNS‐focused databases were screened to find small molecule inhibitors using an in‐silico structure‐based virtual screening method and molecular dynamics simulation. Further selected small molecules were assayed on overexpressed AEP stable cell line (HMC‐3) with exiting peptide and compound 11 Result There is no small molecule inhibitor for the AEP yet, and the screened small molecule could be a potential hit for drug discovery. In addition, we have observed that AEP is involved in various proteinopathies which leads to neuroinflammation and can be reversed. Moreover, we found that our in‐silico screened molecules are more potent than the compound 11 and peptide. Further assays on a stable AEP immortal HMC‐3 cell line also line up with the in‐silico results. Conclusion The selected small molecule presented a potential non‐covalent interaction (hydrogen bonds, ionic bonds, and pi‐pi interaction) within the catalytic binding sites with high binding energies and stable complex during simulation when compared to exiting compound 11 and peptide. The findings from the current study will help identify the critical subgroups needed for the development of our lead AEP inhibitory molecule.