Phellinus baumii is a mushroom utilized as a traditional medicine for a wide range of human ailments, including diabetes, hypertension, hypercholesterolemia, and cancer, in Asia. The purpose of this study was to find out whether Phellinus baumii extract (PBE) could reduce inflammation caused by coal fly ash (CFA) in alveolar macrophages (MH-S). The anti-inflammatory effect of PBE was evaluated by measuring the nitric oxide (NO) concentration after the onset of CFA-stimulated inflammation in MH-S cells. Polymerase chain reaction (PCR) was used to examine inflammatory gene expression. Western blotting and immunofluorescence (IF) studies were used to investigate the inflammatory mechanism in MH-S cells. According to our results, the PBE suppressed CFA-induced NO generation in the MH-S cells dose-dependently. Furthermore, PBE inhibited the proinflammatory mediators and cytokines generated by exposure to CFA, including cyclooxygenase 2 (COX-2) and inducible NO synthase (iNOS), interleukin (IL)-1β, IL-6, and tumor necrosis factor-alpha (TNF-α). Real-time PCR was also used to determine the inhibiting effect of the PBE on proinflammatory factors such as COX-2, iNOS, IL-1β, IL-6, and TNF-α. Moreover, Western blot was used to assess the effects of the PBE on the nuclear factor-kappa B (NF-κB) and mitogen-activated protein kinase (MAPK) pathways in the CFA-stimulated MH-S cells. The suppressive effect of the PBE on phosphorylated (p)-NF-κB translocation was also investigated using IF analysis. This study showed that the PBE suppressed the CFA-induced inflammation in the MH-S cells by suppressing the NF-κB and MAPK signaling pathways, which suggests its potential usefulness in reducing lung inflammation.