The improper productions of nitric oxide and prostaglandins following the inductions of inducible nitric oxide synthase (iNOS) and cyclooxygenase-2 (COX-2) are involved in the pathogenesis of chronic inflammation. Selaginella tamariscina is used as an oriental medicine for its anti-inflammatory effects. Here, we isolated taiwaniaflavone from S. tamariscina and investigated whether taiwaniaflavone affects the induction of iNOS and COX-2 in RAW264.7 macrophages stimulated with lipopolysaccharide. We found that taiwaniaflavone blocks the transactivations of iNOS and COX-2 genes by blocking the nuclear translocation of p65 and subsequent nuclear factor-kappaB inactivation. It is known that NF-kappaB activation is controlled by the phosphorylation and subsequent degradation of I-kappaBalpha, and in the present study, we found that the phosphorylation and degradation of I-kappaBalpha were also inhibited by taiwaniaflavone. Our findings indicate that taiwaniaflavone may provide a developmental basis for an agent against inflammatory diseases.