Moutan Cortex, the root bark of Paeonia suffruticosa ANDREWS in Ranunculaceae, has widely demonstrated analgesic, anti-spasmodic, and anti-inflammatory effects in various cancer and immune cell lines. Oxidative stress is associated with development of several diseases, including liver disease. We prepared the water extract of Moutan Cortex (MCE) to investigate the cytoprotective activities and its mechanism. MCE protected hepatocytes from arachidonic acid (AA) iron induced oxidative stress, as indicated by reactive oxygen species (ROS) production and cell viability analysis. MCE also suppressed mitochondrial dysfunction in AA iron-treated human hepatocyte-derived hepatocellular carcinoma cell line, HepG2 cells. In addition, MCE treatment induces AMP-activated protein kinase (AMPK) and liver kinase B1 phosphorylation, which play a role in inhibition of oxidative stress induced cell death. Moreover, one of the MCE compounds, chlorogenic acid, exerted protective effects against oxidative stress and apoptosis. Taken together, MCE protected hepatocytes against AA iron-induced oxidative stress through AMPK activation, and may be a candidate for the treatment of liver disease.