Auricularia delicata, an edible mushroom, has been used as a traditional medicine in Manipur, India, for various gastrointestinal and liver ailments. This study evaluates the antioxidant, antimicrobial, and hepatoprotective potential of A. delicata. A. delicata fruiting bodies were extracted with hexane, chloroform, ethyl acetate, and methanol. All these extracts were examined for in vitro antioxidant activity. To study antimicrobial activity, minimum inhibitory concentrations (milligrams per milliliter) were determined through the use of the broth dilution method. In vivo hepatoprotective activity against acetaminophen-induced hepatic injury in rats was investigated by evaluating serum biochemistry, antioxidant enzymes, and histopathology. With regard to antioxidant activity, 21 and 48 μg/mL were the lowest half-maximal effective concentrations, obtained for the methanol and ethyl acetate fractions, respectively. In the antimicrobial study, the ethyl acetate fraction showed the lowest inhibition of Bacillus subtilis, Enterococcus feacium, Streptococcus aureus, B. cereus, and Escherichia coli, with minimum inhibitory concentrations of 0.03, 0.015, 0.03, 0.11, and 0.5 mg/mL, respectively. Further, in in vivo studies, elevated levels of biochemical markers were significantly returned to near normal values; this was supported by histopathological changes. Thus A. delicata showed antimicrobial, antioxidant, and protective roles in induced hepatic injury. Phytochemical analysis using high-performance liquid chromatography revealed the presence of chlorogenic acid in the extracts. Its protective property might be due to the presence of a mitochondrial-targeted antioxidant effect of chlorogenic acid. The antimicrobial activity accounts for its use against diarrhea. Hence, A. delicata could be one of the best sources for natural gastrointestinal and hepatoprotective medicines in the future.