Nitric oxide (NO) is a radical molecule produced by iNOS and plays a role in various physiological and pathophysiological conditions including inflammatory diseases and cancer. In the present study, organic extract of Daedalea gibbosa was effective in inhibiting NO and PGE2 production in RAW 264.7 cells. The extract of D. gibbosa was chemically fractionated leading to the isolation of three active fractions (F5-F7) that were effective in inhibiting NO and iNOS production. In addition, F6 and F7 significantly inhibited the iNOS transcript, while F5 did not cause a reduction in the iNOS transcript. Furthermore, the active fractions showed a differential effect on levels of phospho-p38, phospho-JNK, and phospho-IKBalpha. Phopsho-p38 was moderately inhibited by F5 and only F7 was significantly active in inhibiting phospho-IKBalpha. Interestingly, all active fractions significantly enhanced levels of phospho-JNK. In addition, the three active fractions also showed differential inhibitory effects on NF-kappaB DNA binding activity.