Chemoprevention is an important alternative approach to control cancer. Chemical substances with multiple inhibitory properties would be a welcome addition to the class of chemopreventive drugs. In this study, we investigated the antioxidant, anti-inflammatory, antimutagenic and cancer preventive activities of aqueous extract of a macrofungus Phellinus rimosus (Berk) Pilat. The extract exhibited superoxide anion (O2-), hydroxyl radical (*OH), nitric oxide (NO*) scavenging and lipid peroxidation inhibiting activities. The inhibitory concentrations required by the extract to scavenge 50% (IC50) of the superoxide anion, hydroxyl radical and nitric oxide generated were 126 +/- 5.1, 71 +/- 4.7 and 31 +/- 4.5 microg/ml respectively. The concentration required to inhibit 50% of Fe2+ induced lipid peroxidation in rat liver homogenate was 318 +/- 2.4 microg/ml. The extract showed significant (P<0.05) anti-inflammatory activity in a dose dependent manner. Extract (100 mg/kg body wt, p.o) inhibited 44.5, 45.4 and 47% carrageenen, dextran and formalin induced inflammations respectively. The antimutagenic activity was determined by the Ames' Salmonella mutagenecity assay using histidine mutant Salmonella typhimurium strains. The extract at concentration of 5 mg/plate showed antimutagenecity against benzo[a]pyrene (B[a]P) and 4-nitro-o-pheneylenediamine (NPDA) induced mutations of TA98 and TA100 respectively. Anticarcinogenic activity was evaluated using N-nitrosodiethylamine (NDEA) induced hepatocellular carcinoma (HCC) in rats. Serum gamma glutamyl transpeptidase (GGT), glutamate oxaloacetate transaminase (GOT), glutamate pyruvate transaminase (GPT) and alkaline phosphatase (ALP) activities and lipid peroxidation level (MDA) were elevated significantly (P<0.05) in the NDEA alone treated group of animals. Treatment of the extract (25 and 50 mg/kg body wt, p.o.) prior to the NDEA administration decreased the serum GGT, GOT, GPT and ALP activities and MDA level in a dose dependent manner. The NDEA alone treated animals showed altered serum albumin/globulin ratio (A:G ratio), hyperfibrinogenaemia, increased hepatic glutathione S-transferase (GST) activity, glutathione-peroxidsae (GPx) activity and reduced glutathione (GSH) level compared to the extract plus NDEA treated group. The extract also inhibited in vitro aniline hydroxylase (AH) activity of rat liver induced by phenobarbitone in a dose dependent manner. The results, thus suggest the significant chemopreventive properties of the aqueous extract of the Phellinus rimosus against NDEA induced hepatocellular carcinoma by its antioxidant, anti-inflammatory and antimutagenic activities.