Codium fragile (CF) is an edible green alga consumed as a traditional food source in Korea. In this study, the ethanol extract of CF was evaluated to determine if it has anti-inflammatory activity. Lipopolysaccharide (LPS), a toxin from bacteria, is a potent inducer of inflammatory cytokines, such as tumor necrosis factor (TNF)-$alpha$ and interleukin (IL)-6. Therefore, we studied whether CF extracts have an anti-inflammatory effect in LPS-induced murine macrophage cell lines (RAW 264.7). In the present study, IL-6 production was measured using an enzyme-linked immunosorbent assay (ELISA), prostaglandin $E_2$($PGE_2$) production was measured using the EIA kit, and cyclooxygenase (COX)-2 and mitogen-activated protein kinase (MAPK) activation were determined by Western blot analysis. IL-6 mRNA, COX-2 mRNA and iNOS mRNA expression were measured using reverse transcription-polymerase chain reaction (RT-PCR). The results indicated that CF extracts inhibit LPS-induced IL-6, NO and PGE2 production in a dose-dependent manner, as well as expression of iNOS and COX-2. CF extracts significantly inhibited LPS-induced c-Jun N-terminal kinase (JNK) 1/2 phosphorylation. Taken together, these findings may help elucidate the mechanism by which CF modulates RAW 264.7 cell activation under inflammatory conditions.