The Pleurotus pulmonarius LAU 09 was characterized to the species level and registered at the GenBank database (accession number: JF736658). P. pulmonarius LAU 09 formed a phylogenetic cluster with P. pulmonarius complex with bootstrap value of 77%, which confirmed the close evolutionary lineage with previous characterized P. pulmonariuscomplex. The polysaccharide obtained from P. pulmonarius was structurally characterized and tested for antimicrobial and anti-inflammatory activities. The polysaccharide was active against all tested pathogens except Pseudomonas aeruginosawith percentage activity of 85.75%. The highest zone of inhibition was obtained againstStaphylococcus aureus (30 mm), while the lowest zone size obtained againstEscherichia coli (7 mm). The polysaccharide revealed the potent anti-inflammatory effects against carrageenan and formalin –induced paw edema in rats with higher inhibitory percentage in rats writhing; 83.33% and 92.37% inhibition were obtained in carrageenan and formalin-induced paw edema in rats treated with polysaccharide compared with 33.33 and 84.73% in rats treated with standard (dichlofanac) respectively. The percentage sperm motility were higher in both carrageenan and formalin- induced paw edema in rats treated with polysaccharide (76.25 and 67.95%) while its low in dichlofenac treated rats (47.35 and 63.20%) respectively. The sperm counts were increased considerably in the rats treated with polysaccharide (carrageenan: 44.75 × 106, formalin: 44.80 × 106) compared with the control, 24.70 × 106 (carrageenan) and 42.00 × 106 (formalin). The significant (p < 0.05) increased obtained in both carrageenan and formalin-induced paw edema in rats treated with polysaccharide in some blood parameters in comparison with dichlofenac treated rats was an evidence of anti-inflammatory potential of the polysaccharide. Key words: Exopolysaccharide, anti-inflammatory, antimicrobial, carrageenan, formalin.