We reported that lignocellulose decomposition can be used to facilitate the production of bioactive polysaccharides from submerged culture of Inonotus obliquus. Exo-polysaccharide (EPS) production and antioxidant activity by Inonotus obliquus was enhanced by employing lignocellulose decomposition in a corn straw-containing submerged fermentation. A significant increase in the EPS production and hydroxyl radical scavenging activity from 1.09 ± 0.01 g/l and 72.3 ± 1.9% in a basal medium to 1.38 ± 0.02 g/l and 82.7 ± 0.5% in a corn straw-containing medium was obtained. A synchronized effect between lignocellulose decomposition and malondialdehyde presenting hydroxyl radical concentration in the fermentation broth was identified. The adding of thiourea, a hydroxyl radical-scavenging reagent, suppressed malondialdehyde generation and lowered the lignocellulose decomposition rate. Correspondingly, the EPS production and hydroxyl radical scavenging activity decreased to 1.26 g/l and 74%. The EPS obtained from the corn straw-containing medium also presented the strongest superoxide radical scavenging activity. The monosaccharide components of the EPS from the corn straw-containing medium are rhamnose, arabinose, xylose, mannose, glucose, and galactose with molar proportions at 3.0, 3.0, 0.9, 46.6, 11.4, and 35.1%, respectively, which are largely different from the molar proportions of the EPS from the basal medium.