A traditional herbal formulation from a remote Kerala village, consisting of over 20 plants, was evaluated for its phytochemical composition and anti-inflammatory effects. The formulation, used to treat psoriasis and other skin conditions, underwent preliminary phytochemical screening and GC-MS analysis. The methanol, chloroform, and petroleum ether extracts revealed the presence of various bioactive compounds, including alkaloids, phenols, terpenoids, flavonoids, and saponins. GC-MS analysis identified 21 active compounds with therapeutic potential. In vitro anti-inflammatory activity was tested on LPS-stimulated RAW 264.7 macrophages. The extract demonstrated inhibition of protein denaturation and proteinase activity, as well as reduced levels of inflammatory mediators, including COX-2, LOX, cellular nitrite, and iNOS activity. These results suggest that the formulation is rich in bioactive phytochemicals with significant anti-inflammatory potential. This herbal preparation could contribute to the development of new therapeutic agents for inflammation-related disorders.