Glossogyne tenuifolia Cassini (Hsiang-Ju in Chinese) is a perennial herb native to Taiwan. It was used in traditional Chinese medicine (TCM) as an antipyretic, anti-inflammatory, and hepatoprotective agent. Recent studies have shown that extracts of G. tenuifolia possess various bioactivities, including anti-oxidant, anti-inflammatory, immunomodulation, and anti-cancer properties. However, the pharmacological activities of G. tenuifolia essential oils have not been studied. In this study, we extracted essential oil from air-dried G. tenuifolia plants, then investigated the anti-inflammatory potential of G. tenuifolia essential oil (GTEO) on lipopolysaccharide (LPS)-induced inflammation in murine macrophage cells (RAW 264.7) in vitro. Treatment with GTEO (25, 50, and 100 μg/mL) significantly as well as dose-dependently inhibited LPS-induced pro-inflammatory molecules, such as nitric oxide (NO) and prostaglandin E2 (PGE2) production, without causing cytotoxicity. Q-PCR and immunoblotting analysis revealed that the inhibition of NO and PGE2 was caused by downregulation of their corresponding mediator genes, inducible nitric oxide synthase (iNOS), and cyclooxygenase-2 (COX-2), respectively. Immunofluorescence and luciferase reporter assays revealed that the inhibition of iNOS and COX-2 genes by GTEO was associated with the suppression of nuclear export and transcriptional activation of the redox-sensitive transcription factor, nuclear factor -κB (NF-κB). In addition, GTEO treatment significantly inhibited phosphorylation and proteosomal degradation of the inhibitor of NF-κB (I-κBα), an endogenous repressor of NF-κB. Moreover, treatment with GTEO significantly blocked the LPS-mediated activation of inhibitory κB kinase α (IKKα), an upstream kinase of the I-κBα. Furthermore, p-cymene, β-myrcene, β-cedrene, cis-β-ocimene, α-pinene, and D-limonene were represented as major components of GTEO. We found that treatment with p-cymene, α-pinene, and D-limonene were significantly inhibiting LPS-induced NO production in RAW 264.7 cells. Taken together, these results strongly suggest that GTEO inhibits inflammation through the downregulation of NF-κB-mediated inflammatory genes and pro-inflammatory molecules in macrophage cells.