The aim of this study was to investigate the anti-inflammatory activity of a previously un-studied wild mushroom, Echinodontium tinctorium, collected from the forests of north-central British Columbia. The lipopolysaccharide (LPS)-induced RAW264.7 macrophage model was used to study the in vitro anti-inflammatory activity. The crude alkaline extract demonstrated potent anti-inflammatory activity, and was further purified using a “bio-activity-guided-purification” approach. The size-exclusion and ion-exchange chromatography yielded a water-soluble anti-inflammatory polysaccharide (AIPetinc). AIPetinc has an average molecular weight of 5 kDa, and is a heteroglucan composed of mainly glucose (88.6%) with a small amount of galactose (4.0%), mannose (4.4%), fucose (0.7%), and xylose (2.3%). In in vivo settings, AIPetinc restored the histamine-induced inflammatory event in mouse gluteus maximus muscle, thus confirming its anti-inflammatory activity in an animal model. This study constitutes the first report on the bioactivity of Echinodontium tinctorium, and highlights the potential medicinal benefits of fungi from the wild forests of northern British Columbia. Furthermore, it also reiterates the need to explore natural resources for alternative treatment to modern world diseases.