Aucklandia lappa Decne., known as “Mok-hyang” in Korea, has been used for the alleviation of abdominal pain, vomiting, diarrhea, and stress gastric ulcers in traditional oriental medicine. We investigated the anti-inflammatory and antioxidative effects of the ethanol extract of Aucklandia lappa Decne. (ALDE) in lipopolysaccharide (LPS)-stimulated RAW 264.7 cells. ALDE significantly inhibited the LPS-induced nitric oxide (NO) production and reduced inducible nitric oxide synthase (iNOS) expression in RAW 264.7 cells. The production of other proinflammatory mediators, including COX-2, interleukin (IL)-6, IL-1β, and tumor necrosis factor (TNF)-α, was reduced by ALDE in LPS-stimulated RAW 264.7 cells. The mechanism underlying the anti-inflammatory effects of ALDE was elucidated to be the suppression of LPS-induced nuclear translocation of p65, followed by the degradation of IκB and the inhibition of the phosphorylation of mitogen-activated protein kinases (MAPK). In addition, ALDE showed enhanced radical scavenging activity. The antioxidant effect of ALDE was caused by the enhanced expression of heme oxygenase (HO-1) via stabilization of the expression of the nuclear transcription factor E2-related factor 2 (Nrf2) pathway. Collectively, these results indicated that ALDE not only exerts anti-inflammatory effects via the suppression of the NF-κB and MAPK pathways but also has an antioxidative effect through the activation of the Nrf2/HO-1 pathway.