Cupressus torulosa is an evergreen tree with a wide distribution in north‐western Himalayan region of India. Its needles have long been used in traditional medicine for anti‐inflammatory, antimicrobial, and wound‐healing properties. This study aimed to scientifically validate the traditional claim of the needles to treat inflammation by evaluating the chemical composition, antioxidant potential, and anti‐inflammatory activity of the essential oil extracted from the needles (CTEO) using hydro‐distillation. Qualitative and quantitative chemical composition of the CTEO was determined with the aid of GC‐MS and GC‐FID techniques. The major constituents of the CTEO were terpinen‐4‐ol (393.8±12.5 µg/mg), totarol (55.0±17.2 µg/mg), and sabinene (43.7±2.8 µg/mg). CTEO exhibited significant antioxidant activity when evaluated using DPPH free radical scavenging and reducing power assays. Furthermore, the CTEO demonstrated good anti‐inflammatory behavior in in vitro egg albumin denaturation assay, with an IC50 of 27.32 µg/mL. In vivo tests using carrageenan‐induced paw edema and xylene‐induced ear edema in rats showed significant effects at doses of 30 mg/kg for up to 1 hour. The significant discoveries not only support the established assertions about the anti‐inflammatory properties of C. torulosa needles but also highlight their potential as a useful resource in the growing herbal, complementary, and alternative medicine sectors.