Cordyceps militaris is known for its curative properties. The present study was undertaken to evaluate the reduction of nitric oxide production by BV2 cells by the bioactive fraction of stroma powder of C. militaris, and to deduce the potential chemical components and pathways that may be responsible. The CE2 fraction from ethyl acetate extract did not exert any cytotoxic effects toward the BV2 cells at concentrations 0.1 to 100 μg/mL. The CE2 fraction also showed a significant (p < 0.05) reduction in nitric oxide production at 1-100 μg/mL. At 10 μg/mL, the CE2 fraction attenuated 85% of the NO production in BV2 cells. Further, the CE2 fraction (10 μg/mL) downregulated inflammatory genes, iNOS and COX-2, and upregulated anti-inflammatory genes, HO-1 and NQO-1. The CE2 fraction reduced NO production via activation of NRF2 and NF-κB transcriptions. The chemical constituents of the bioactive CE2 fraction were identified via GCMS. Eleven lipid components were identified including fatty acids, fatty acid esters, and sterols.