Carrageenans are economically important biopolymers used in the pharmaceutical, chemical and food industries. The present study was performed to optimise the extraction of carrageenan from Hypnea musciformis collected from Saint Martin Island, Bay of Bengal, Bangladesh, and characterisation of its chemical, rheological properties and antioxidant activities. Aqueous- and alkali-treated carrageenan from H. musciformis was extracted using conventional method and ultrasonic-assisted extraction (UAE) because this technique allows rapid extraction, which is important to avoid degradation of labile compounds. The resulting carrageenan was investigated in terms of yield, sulphate, 3,6-anhydrogalactose (AG), galactose (Gal) contents and structural properties using Fourier transform infrared (FT-IR) and 1H NMR spectroscopy. The carrageenan yield was higher using the novel UAE method and was comparable to that using the conventional technique. In vitro results confirmed a slight variation in sulphate, AG and Gal contents depending on the extraction method used. FT-IR and 1H NMR spectrum showed that carrageenan extracted using either the conventional method or UAE possesses typical analytical characteristics of κ-carrageenan. The rheological properties of carrageenan were evaluated using differential scanning calorimetery (DSC) and viscosity measurements and found to be similar to those of carrageenan extracted from same species of red alga. The antioxidant activity of carrageenan was measured using the 2,2-diphenyl-1-picrylhydrazyl (DPPH), OH radical scavenging, reducing power and phosphomolybdenum assays. The results indicated that carrageenan possesses antioxidant activity, the degree of which depends on its structural composition and the extraction method used.