Gmelina arborea has been traditionally used for treatment of abdominal pain, burning sensation and as stomachic. The anti-inflammatory effect of aqueous and methanol extract of this plant has been studied but detailed investigations on anti-inflammatory activity of G. arborea stem bark are still not available. Therefore, the present study was designed to evaluate the anti-inflammatory activity of methanol extract and its fractions using carrageenan induced paw oedema model. Methanol extract at the dose of 500 mg/kg and its ethyl acetate fraction at 50 mg/kg showed significant reduction in paw oedema in comparison with standard drug. Ethyl acetate fraction was subjected to column chromatography which resulted in isolation of a new flavonoid (GM-01). Anti-inflammatory effect of methanol extract and its fractions can be attributed to the presence of the flavonoid GM-01. Further studies are underway for evaluation of anti-inflammatory effect of GM-01 and identification of active constituents present in ethyl acetate fraction.