This study was conducted in order to evaluate the anti-inflammatory activities of Phellinus linteus (PL) water extract against carrageenan- and cotton pellet-induced acute and chronic inflammation in rats. Animals were divided into four experimental groups for conduct of acute and chronic inflammations studies: the vehicle control group, positive control group (aminopyrine 100 mg/kg), PL 10 mg/kg group, and PL 20 mg/kg group. Oral administration of PL water extract has dose-dependent anti-inflammatory effects against both acute and chronic inflammation models. In carrageenan-induced paw edema, significant inhibition was observed at 0.5 and 1 h in the PL 10 mg/kg group and at 0.5, 1, 2, 3, 4, and 6 h in the PL 20 mg/kg group. In cotton pellet-induced granuolma formation, PL water extract at 10 and 20 mg/kg/day also showed significant inhibition in dry weights of granuloma. Results of the free radical scavenging assay showed that PL has a dose-dependent scavenging activity against 2,2-diphenyl-1-picrylhydrazyl free radicals. The results obtained in this study indicate that this plant material may be used beneficially as an anti-inflammatory agent having antioxidant action.