This paper attempts to evaluate the antiinflammatory potential and the possible mechanism of action of the leaf extracts and isolated compound(s) of Aerva sanguinolenta (Amaranthaceae), traditionally used in ailments related to inflammation. The anti-inflammatory activity of ethanol extract (ASE) was evaluated by acute, subacute and chronic models of inflammation, while a new cerebroside ('trans', ASE-1), isolated from the bioactive ASE and characterized spectroscopically, was tested by carrageenan-induced mouse paw oedema and protein exudation model. To understand the underlying mechanism, we measured the release of pro-inflammatory mediators such as nitric oxide (NO) and prostaglandin (PG)E2, along with the cytokines like tumour necrosis factor (TNF)-a, and interleukins(IL)-1b, IL-6 and IL-12 from lipopolysaccharide (LPS)-stimulated peritoneal macrophages. The results revealed that ASE at 400 mg/kg caused significant reduction of rat paw oedema, granuloma and exudative inflammation, while the inhibition of mouse paw oedema and exudative inflammation by ASE-1 (20 mg/kg) was comparable to that of the standard drug indomethacin (10 mg/kg). Interestingly, both ASE and ASE-1 showed significant inhibition of the expressions of iNOS2 and COX-2, and the down-regulation of the expressions of IL-1b, IL-6, IL-12 and TNF-a, in LPS-stimulated macrophages, via the inhibition of COX-2-mediated PGE2 release. Thus, our results validated the traditional use of A. sanguinolenta leaves in inflammation management.