To identify bioactive natural products possessing anti-inflammatory activity, the potential of fulgidic acid from the rhizomes of Cyperus rotundus and the underlying mechanisms involved in its anti-inflammatory activity were evaluated in this study. Fulgidic acid reduced the production of nitric oxide (NO), prostaglandin E₂ (PGE₂), tumor necrosis factor-α (TNF-α), and interleukin-6 (IL-6) in lipopolysaccharide (LPS)-induced RAW264.7 macrophages. Consistent with these findings, fulgidic acid suppressed the LPS-induced expression of inducible nitric oxide synthase (iNOS) and cyclooxygenase-2 (COX-2) at the protein level, as well as iNOS, COX-2, TNF-α, and IL-6 at mRNA levels. Fulgidic acid suppressed the LPS-induced transcriptional activity of activator protein-1 (AP-1) as well as the phosphorylation of c-Fos and c-Jun. On the other hand, fulgidic acid did not show any effect on LPS-induced nuclear factor κB (NF-κB) activity. Taken together, these results suggest that the anti-inflammatory effect of fulgidic acid is associated with the suppression of iNOS, COX-2, TNF-α, and IL-6 expression through down-regulating AP-1 activation in LPS-induced RAW264.7 macrophages.