The blood-brain barrier (BBB) is a dynamic component of the brain-vascular interface that maintains brain homeostasis and regulates solute permeability into brain tissue. The expression of tight junction proteins between adjacent endothelial cells and the presence of efflux proteins prevents entry of foreign substances into the brain parenchyma. BBB dysfunction, however, is evident in many neurological disorders including ischemic stroke, trauma, and chronic neurodegenerative diseases. Currently, major contributors to BBB dysfunction are not well understood. Here, we employed a multicellular 3D neurovascular unit organoid containing human brain microvascular endothelial cells, pericytes, astrocytes, microglia, oligodendrocytes and neurons to model the effects of hypoxia and neuroinflammation on BBB function. Organoids were cultured in hypoxic chamber with 0.1% O2 for 24 hours. Organoids cultured under this hypoxic condition showed increased permeability, pro-inflammatory cytokine production, and increased oxidative stress. The anti-inflammatory agents, secoisolariciresinol diglucoside and 2-arachidonoyl glycerol, demonstrated protection by reducing inflammatory cytokine levels in the organoids under hypoxic conditions. Through the assessment of a free radical scavenger and an anti-inflammatory endocannabinoid, we hereby report the utility of the model in drug development for drug candidates that may reduce the effects of ROS and inflammation under disease conditions. This 3D organoid model recapitulates characteristics of BBB dysfunction under hypoxic physiological conditions and when exposed to exogenous neuroinflammatory mediators and hence may have potential in disease modeling and therapeutic development.