Accumulating evidence suggests that nitric oxide (NO) and prostaglandin E(2) (PGE(2)) are involved in the pathogenesis of various chronic inflammatory diseases and cancer. During the course of a screening program to identify natural anti-inflammatory substances, we isolated the compound 2-amino-3H-phenoxazin-3-one (APO) from an extract of the edible brown mushroom Agaricus bisporus IMBACH. APO inhibited NO production by mouse peritoneal macrophages in response to the pro-inflammatory stimuli lipopolysaccharide (LPS) and interferon (IFN)-gamma (LPS/IFN-gamma) at low concentrations (IC(50)=1.5 microM) through reduced inducible NO synthase protein expression. PGE(2) production by LPS/IFN-gamma-stimulated macrophages was inhibited by APO at much lower concentrations (IC(50)=0.27 microM) than those required for the inhibition of NO production. Mechanistic analysis showed that APO inhibited both cyclooxygenase (COX)-1 and COX-2 enzyme activities with almost equal selectivity. Secretion of NO and the pro-inflammatory cytokine IL-6 by IFN-gamma-activated RAW264.7 cells, a murine macrophage-like cell line, was also dose-dependently reduced by APO. Furthermore, APO increased the secretion of the anti-inflammatory cytokine IL-4 by antigen-stimulated T cells and promoted the polarization of CD4(+) Th cells toward the anti-inflammatory Th2 phenotype at equimolar concentrations that inhibited NO production. Our results suggested that APO induced polarization toward the Th2 subset, at least in part through the down-regulation of IL-12 production. Thus, APO appears to have potent anti-inflammatory and immunoregulatory properties that may provide a promising therapeutic strategy for the treatment of T cell-mediated inflammatory autoimmune diseases as well as for bacteria-induced chronic-inflammatory diseases.