Pleurotus ostreatus, also known as oyster mushroom, is studied for its immunomodulatory and anticancer properties. The present study aimed to find a bioactive proteoglycan from a fruiting body of P. ostreatus that could be used as a biological response modifier for immunomodulatory and anticancer effects with the fewest side effects. A water-soluble fraction of alcohol-precipitated fruiting body extract was purified through anion and cation exchange chromatography, followed by gel filtration (Sephadex G-100) chromatography. The purified proteoglycan fraction was represented by the polysaccharide-to-protein ratio of 3.46. The monosaccharide composition analysis of the proteoglycan showed the presence of galactose, mannose, and glucose in the ratio of 12:11:10. The fraction was examined for its immunomodulatory and anticancer effects in a mouse Sarcoma-180 model. The purified proteoglycan stimulated the growth of thymocytes and splenocytes and induced interleukin-4 and interferon gamma in vitro. It also activated macrophages to produce nitric oxide, super oxide anion, and hydrogen peroxide. The growth inhibition of Sarcoma-180 cells both in vivo and in vitro by this proteoglycan fraction was significant and arrested cell cycle in G0/G1 phase. © 2007 by Begell House, Inc.