In the present study, we investigated the hepatoprotective and antioxidant capacities of ethanol extract of Phellinus merrillii (PM) on carbon tetrachloride-induced hepatotoxicity. In high-performance liquid chromatography (HPLC) analysis, the finger print chromatogram of PM was established. Both hispolon and PM showed a similar peak at the retention time of 6 min. This implied that PM did contain the active ingredient of hispolon. Treatment with PM (0.5, 1 and 2 g/kg) prior to the administration of carbon tetrachloride (1.5 ml/kg in olive oil, 20%) significantly prevented the increased serum alanine aminotransferase (s-GOT) and serum aspartate aminotransferase (s-GPT) in a dose-dependent manner. We also found that the incidences of ballooning degeneration, necrosis and portal triaditis were lowered in the group pretreated with PM. Carbon tetrachloride induces up-regulation of antioxidant enzymes, including superoxide dismutase (SOD) (86.6%), catalase (58.8%) and glutathione peroxidase (GPx)(64.7%) in the liver. Pretreatment with PM significantly reduced the all these antioxidant enzyme activities. Therefore, we verified that ethanol extract of PM has the hepatoprotective and antioxidant capacities on rats.