Mutolide an anti-inflammatory compound was isolated from the coprophilous fungus Lepidosphaeria sp. (PM0651419). The compound mitigated LPS-induced secretion of pro-inflammatory cytokines TNF-α and IL-6 from THP-1 cells as well as human peripheral blood mononuclear cells (hPBMCs). Mutolide also inhibited secretion of another pro-inflammatory cytokine IL-17 from anti-hCD3/anti-hCD28 stimulated hPBMCs. NF-κB is the major transcription factor involved in the secretion of pro-inflammatory cytokines including IL-17. Mechanistic evaluations revealed that mutolide inhibited induced NF-κB activation and translocation from cytoplasm into the nucleus. However, mutolide did not significantly affect activity of p38 MAPK enzyme, a serine/threonine kinase involved in cell cycle proliferation and cytokine secretion. These results indicate that mutolide may exert its anti-inflammatory effect via NF-κB inhibition. Oral administration of mutolide at 100 mg/kg showed significant inhibition of LPS-induced release of TNF-α from Balb/c mice in an acute model of inflammation. Our results highlight the anti-inflammatory properties of mutolide and suggest that further evaluation in a chronic model of inflammation is required to confirm the potential of mutolide as a druggable candidate for the treatment of inflammatory diseases.