Neuroinflammation and microglial activation are pathological features in central nervous system disorders. Excess levels of reactive oxygen species (ROS) and pro-inflammatory cytokines have been implicated in exacerbation of neuronal damage during chronic activation of microglial cells. Padina australis, a brown macroalga, has been demonstrated to have various pharmacological properties such as anti-neuroinflammatory activity. However, the underlying mechanism mediating the anti-neuroinflammatory potential of P. australis remains poorly understood. We explored the use of Malaysian P. australis in attenuating lipopolysaccharide (LPS)-stimulated neuroinflammation in BV2 microglial cells. Fresh specimens of P. australis were freeze-dried and subjected to ethanol extraction. The ethanol extract (PAEE) was evaluated for its protective effects against 1 µg/ml LPS-stimulated neuroinflammation in BV2 microglial cells. LPS reduced the viability of BV2 microglia cells and increased the levels of nitric oxide (NO), prostaglandin E2 (PGE2), intracellular reactive oxygen species (ROS), inducible nitric oxide synthase (iNOS), cyclooxygenase-2 (COX-2), tumor necrosis factor-alpha (TNF-α), and interleukin-6 (IL-6). However, the neuroinflammatory response was reversed by 0.5-2.0 mg/ml PAEE in a dose-dependent manner. Analysis of liquid chromatography-mass spectrometry (LC-MS) of PAEE subfractions revealed five compounds; methyl α-eleostearate, ethyl α-eleostearate, niacinamide, stearamide, and linoleic acid. The protective effects of PAEE against LPS-stimulated neuroinflammation in BV2 microglial cells were found to be mediated by the suppression of excess levels of intracellular ROS and pro-inflammatory mediators and cytokines, denoting the protective role of P. australis in combating continuous neuroinflammation. Our findings support the use of P. australis as a possible therapeutic for neuroinflammatory and neurodegenerative diseases.