7,8-Dihydroxy-4-methylcoumarin (Dhmc) is a precursor in the synthesis of derivatives of 4-methyl coumarin, which has excellent radical scavenging properties. In this study, we investigated whether Dhmc protects against oxidative stress and ischemic brain injury. We found that Dhmc protected against glutamate toxicity in hippocampal HT-22 cells in a concentration-dependent manner in vitro. Dhmc inhibited glutamate-induced glutathione depletion and generation of reactive oxygen species, suggesting that Dhmc has an antioxidant effect. In addition, Dhmc inhibited glutamate-induced depletion of hippocalcin, a protein that buffers intracellular calcium and prevents calcium-induced cell death. In our in vivo studies, Dhmc reduced infarct volume in neonatal rats when administered 4 h after cerebral hypoxia/ischemia injury and attenuated the hypoxia/ischemia injury-induced decrease of hippocalcin expression in neonatal rats. Taken together, these results suggest that Dhmc prevents glutamate-induced toxicity by scavenging free radicals and regulating hippocalcin expression. Dhmc may represent a promising agent in the treatment of acute and chronic neurological disorders induced by oxidative stress.