Essential oils are concentrated hydrophobic liquids containing volatile aromatic compounds from plants. In the present study, the essential oil of Chamaecyparis obtusa (C. obtusa), which is commercially used in soap, toothpaste and cosmetics, was extracted. Essential oil extracted from C. obtusa contains several types of terpenes, which have been shown to have anti-oxidative and anti-inflammatory effects. In the present study, we examined the anti-inflammatory effects of C. obtusa essential oil in vivo and in vitro following the induction of inflammation by lipopolysaccharides (LPS) in rats. While LPS induced an inflammatory response through the production of prostaglandin E2 (PGE2) in the blood and peripheral blood mononuclear cells (PMNCs), these levels were reduced when essential oil was pre-administered. Additionally, the mechanism of action underlying the anti-inflammatory effects of C. obtusa essential oil was investigated by measuring the mRNA expression of inflammation‑associated genes. LPS treatment significantly induced the expression of transforming growth factor α (TNFα) and cyclooxygenase-2 (COX-2) in rats, while C. obtusa essential oil inhibited this effect. Taken together, our results demonstrate that C. obtusa essential oil exerts anti‑inflammatory effects by regulating the production of PGE2 and TNFα gene expression through the COX-2 pathway. These findings suggest that C. obtusa essential oil may constitute a novel source of anti-inflammatory drugs.