In this study, the anti-inflammatory activity of sulfated polysaccharides isolated from the green seaweed Codium fragile (CFCE-PS) was investigated in lipopolysaccharide (LPS)-stimulated RAW 264.7 macrophages and zebrafish. The results demonstrated that CFCE-PS significantly increased the viability of LPS-induced RAW 264.7 cells in a concentration-dependent manner. CFCE-PS remarkably and concentration-dependently reduced the levels of inflammatory molecules including prostaglandin E2, nitric oxide (NO), interleukin-1 beta, tumor necrosis factor-alpha, and interleukin-6 in LPS-stimulated RAW 264.7 cells. In addition, in vivo test results indicated that CFCE-PS effectively reduced reactive oxygen species, cell death, and NO levels in LPS-stimulated zebrafish. Thus, these results indicate that CFCE-PS possesses in vitro and in vivo anti-inflammatory activities and suggest it is a potential ingredient in the functional food and pharmaceutical industries.