Lichens are used since antiquity for multiple therapeutic purposes, treating infections, fever, convulsions, and wounds. This study was designed to evaluate the antioxidant and anti-inflammatory effects of the lichen Parmotrema hypotropa (NYL.) Hale. The total phenolics and flavonoids content were determined in ethanol extract; the antioxidant activity was assessed by different chemical assays DPPH (1,1-diphenyl-2-picrylhydrazyl), ABTS (2,2'-azino-bis(3-ethylbenzothiazoline-6-sulfonic acid)), β-carotene-linoleic acid, reducing power, and Cupric reducing antioxidant capacity (CUPRAC). The lichen extract was further tested in vitro, for its anti-inflammatory effect through the bovine serum albumin denaturation assay; also the inflammatory response was investigated on the LPS-stimulated human keratinocyte cell line (HaCaT) by measuring intercellular ROS (Reactive Oxygen Species) and TNF-α (Tumor necrosis factor-alpha) production; the amount of usnic acid in the extract was determined by High-Performance Liquid Chromatography (HPLC). The results showed that the tested extract contained high levels of total phenolics than flavonoids, and had an antioxidant effect; it prevented the protein denaturation in a dose-dependent manner, also reduced the intracellular ROS and TNF-α production by HaCaT cells. Furthermore, it did not affect the viability of HaCaT cells; the extract contained small amounts of usnic acid. Based on the different findings, P.hypotropa can constitute a potential source of bioactive compounds with antioxidant and anti inflammatory effects.