Achillea millefolium L. is a member of the Asteraceae family and has been used in folk medicine in many countries. In this study, 19 compounds in A. millefolium essential oil (AM-EO) have been identified; the major components are artemisia ketone (14.92%), camphor (11.64%), linalyl acetate (11.51%) and 1,8-cineole (10.15%). AM-EO can suppress the inflammatory responses of lipopolysaccharides (LPS)-stimulated RAW 264.7 macrophages, including decreased levels of cellular nitric oxide (NO) and superoxide anion production, lipid peroxidation and glutathione (GSH) concentration. This antioxidant activity is not a result of increased superoxide dismutase (SOD), catalase (CAT), glutathione peroxidase (GPx) activities, but rather occurs as a result of the down-regulation of inducible nitric oxide synthase (iNOS), cyclooxygenase-2 (COX-2), tumor necrosis factor-α (TNF-α), interleukin-6 (IL-6) and heme oxygenase-1 (HO-1) expression, thus reducing the inflammatory response. Therefore, AM-EO can be utilized in many applications, including the treatment of inflammatory diseases in the future.