Chamomile has long been used in traditional medicine for the treatment of inflammation-related disorders. In this study we investigated the inhibitory effects of chamomile on nitric oxide (NO) production and inducible nitric oxide synthase (iNOS) expression, and explored its potential anti-inflammatory mechanisms using RAW 264.7 macrophages. Chamomile treatment inhibited LPS-induced NO production and significantly blocked IL-1β, IL-6 and TNFα-induced NO levels in RAW 264.7 macrophages. Chamomile caused reduction in LPS-induced iNOS mRNA and protein expression. In RAW 264.7 macrophages, LPS-induced DNA binding activity of RelA/p65 was significantly inhibited by chamomile, an effect that was mediated through the inhibition of IKKβ, the upstream kinase regulating NF-κB/Rel activity, and degradation of inhibitory factor-κB. These results demonstrate that chamomile inhibits NO production and iNOS gene expression by inhibiting RelA/p65 activation and supports the utilization of chamomile as an effective anti-inflammatory agent.