Sanghuangporus sanghuang is a rare fungus growing on mulberry trees that has immense medicinal value. This study aimed to optimize the liquid-fermentation-media formulation and culture conditions for large-scale culturing of S. sanghuang by performing one-way testing and response surface methodology. The antioxidant and anticancer activities of the extracellular polysaccharides from S. sanghuang were also analyzed. The optimal formulation and growth conditions for S. sanghuang were as follows: glucose, 30.2 ± 0.37 g/L; yeast extract, 14.60 ± 0.05 g/L; dandelion powder, 1.24 ± 0.01 g/L; shaker speed, 150 r/min; and temperature, 25 °C. We obtained 13.99 ± 0.42 g/L of mycelium biomass by culturing S. sanghuang for 15 days with the optimized formulation. This was 2-fold higher than the mycelial mass obtained with the sub-optimal formulation. The extracellular fungal polysaccharides showed significant antioxidant activity against ABTS and DPPH free radicals, and significantly reduced the in vitro growth and survival of several cancer cell lines. The anticancer activity of the extracellular fungal polysaccharides was significantly higher in the human glioma cells than in other cancer cell lines. In summary, this study optimized the liquid media formulation and conditions for the large-scale culturing of S. sanghuang. Furthermore, the extracellular polysaccharides from S. sanghuang showed significant antioxidant and anticancer activities.