Different solvent extracts of Cordyceps militaris stroma powder were tested for cell viability and inhibition of nitric oxide (NO) production in lipopolysaccharide (LPS) triggered BV2 microglia cells. Chemical investigation of the ethyl acetate fraction resulted in an enriched ergosterol sub-fraction CE3. The BV2 cells showed no cytotoxic effects when treated with the ethyl acetate fraction and sub-fraction CE3 at concentrations of 0.1 μg/mL - 100 μg/mL compared with the control. At 10 μg/mL, the ethyl acetate fraction and sub-fraction CE3 had the highest reduction of 48.0% and 44.7% of nitric oxide production, respectively. The major compound in sub-fraction CE3 was ergosterol, identified by GCMS, and the purity was checked by HPLC. Further, the reduction of nitric oxide in LPS triggered BV2 cells was about three fold higher when compared with the control commercial ergosterol.