Chitooligosaccharide (COS), found in both insects and marine sources, has several bioactivities, such as anti-inflammation and antioxidant activities. However, the mechanism of shrimp shell COS on retardation of inflammatory and antioxidant effects is limited. Therefore, the aim of this study is to examine the mechanism of the aforementioned activities of COS in LPS-activated RAW264.7 macrophage cells. COS significantly improved cell viability in LPS-activated cells. COS at the level of 500 µg/mL could reduce the TNF-α, NO and IL-6 generations in LPS-activated cells (p < 0.05). Furthermore, COS could reduce ROS formation, NF-κB overactivation, phosphorylation of Erk1/2 and Akt and Nrf2/HO-1 in LPS-exposed cells. These results indicate that COS manifests anti-inflammatory activity and antioxidant action via NF-κB, Erk1/2, Akt and Nrf2/HO-1 signaling with an increasing relevance for inflammatory disorders.