Entomopathogenic fungus Cordyceps militaris is famous for its medicinal efficacies. It has been reported to have various pharmacological activities such as anti-tumour, insecticidal, antibacterial, immunomodulatory and antioxidant. In this study, we investigated the effect of the extract of C. militaris (MPUN8501), which was identified by the analysis of the nucleotide sequences of 5.8S ribosomal RNA, on the function of liver. C. militaris powder was extracted using hot water extracts method as time, volume and temperature and using method as differential polarity of organic solvent. Each fraction was tested for the improvement of hepatic enzyme alcohol dehydrogenase (ADH) and acetaldehyde dehydrogenase (ALDH) activity. The BuOH extracts (CME) had highest activity which was used for the test of toxicity and efficacy of C. militaris. The enhancing effect of CME on the activity of ADH and ALDH was much more than medicine, drink, natural tea etc. Thus CME promoted the resolution of alcohol and acetaldehyde in rats, inducing recovery to normal condition rapidly. Furthermore, oral administration of CME effectively protected the carbon tetrachloride-induced acute hepatic injury as revealed by the hematological parameters (levels of sGOT and sGPT) and histological observation. CME was ascertained to be safe by regulatory toxicity studies of single dose toxicity and genotoxicity. These results suggest that CME would be useful for the maintaining normal hepatic activity as a functional health food.