Natural antioxidant products are increasingly being used to treat various pathological liver injuries considering the role of oxidative stress in their pathogenesis. Auricularia polytricha has been used as food or medicine due to its antioxidant activity. The aim of the study was to evaluate the protective effect of the aqueous extract of the fruiting bodies of A. polytricha against paracetamol-induced liver toxicity in rats. Liver toxicity was induced in Sprague-Dawley rats by oral administration of 2g/kg paracetamol on the 15th day after the administration of aqueous extract and silymarin 100 mg/kg. Aqueous extract of A. polytricha was administered orally at 250 and 500 mg/kg doses, daily for a period of 14 days. Aspartate aminotransferase (AST), Alanine transaminase (ALT) and Alkaline phosphatase (ALP), Lactate dehydrogenase (LDH), Total bilirubin (TB), Total protein (TP), Triglycerides (TG) and cholesterol were measured to assess the effect of the extract on paracetamol-induced hepatic damage. The patent on Auricularia Polytricha (EP0413052A1) assisted in selecting the extraction procedure. The study also included histopathological examination of liver sections to assess hepatoprotective activity. Paracetamol significantly (P<0.001) increased the serum AST, ALT, ALP, LDH, TB, TG and cholesterol and decreased TP levels. Extract treatment significantly (P<0.001 to P<0.05) attenuated the paracetamol induced increase in AST, ALT, ALP, LDH, TB, TG and cholesterol and increased the diminished TP in a dose dependent manner. The standard drug, silymarin produced significant (P<0.001) decrease in AST, ALT, ALP, LDH, TB, TG and cholesterol and increase in TP. Histopathological examination of animals treated with paracetamol showed large areas of centrilobular necrosis with congestion and dilatation in both central and portal veins. These results indicate that the aqueous extract of A. polytricha has significant protective effect against paracetamol-induced liver toxicity in rats, due to its potent antioxidant activity.