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(1) Background: Three isolated compounds from Physalis alkekengi var. franchetii (PAF) have been investigated to possess a variety of biological activities. Their structures were elucidated by spectroscopic analysis (Ultraviolet (UV), High-resolution electrospray mass spectrometry (HR-ESI-Ms), and their anti-inflammatory effects were evaluated in vitro; (2) Methods: To investigate the mechanisms of action of PAF extracts and their isolated compounds, their anti-inflammatory effects were assessed in RAW 264.7 macrophages stimulated by lipopolysaccharide (LPS). RAW 264.7 cells were treated with different concentrations of Physalis alkekengi var. franchetii three isolated compounds of PAF for 30 min prior to stimulation with or without LPS for the indicated times. The inflammatory cytokines, interleukin (IL)-1β and tumor necrosis factor (TNF)-α were determined using reverse transcription-polymerase chain (RT-PCR); (3) Results Treatment of RAW 264.7 cells with LPS alone resulted in significant increases in inflammatory cytokine production as compared to the control group (p < 0.001). However, with the treatment of isophysalin B 100 μg/mL, there was a significant decrease in the mRNA expression levels of TNF-α in LPS-stimulated raw 264.7 cells (p < 0.001). With treatment of physalin 1–100 μg/mL, there was a markedly decrease in the mRNA expression levels of TNF-α in LPS stimulated raw 264.7 (p < 0.05). Moreover, TNF-α mRNA (p < 0.05) and IL-1β mRNA (p < 0.001) mRNA levels were significantly suppressed after treatment with 3′,7-dimethylquercetin in LPS stimulated Raw 264.7 cells; (4) Conclusions: These findings suggest that three isolated compounds from can suppress inflammatory responses in LPS stimulated macrophage.