A balanced inflammatory response is crucial for the organism to defend against external infections, however, an exaggerated response may lead to detrimental effects, including tissue damage and even the onset of disease. Therefore, anti-inflammatory drugs are essential for the rational control of inflammation. In this study, we found that a previously screened peptide TaY (KEKKEVVEYGPSSYGYG) was able to inhibit the LPS-induced RAW264.7 inflammatory response by decreasing a series of proinflammatory cytokines, such as TNF-α, IL-6, and nitric oxide (NO). To elucidate the underlying mechanism, we conducted further investigations. Western blot analysis showed that TaY reduced the phosphorylation of key proteins (IKK-α/β, IκB-α,NF-κB (P65)) in the TLR4-NF-κB signaling pathway and inhibited the inflammatory response. Furthermore, molecular docking and molecular dynamic simulations suggested that TaY binds to the hydrophobic pocket of MD2 through hydrogen bonding and hydrophobic interactions, potentially competing with LPS for MD2 binding. Collectively, TaY is a promising candidate for the development of novel therapeutic strategies against inflammatory disorders.