Background: The MK1 strain, a novel bacterial isolate from soft-rotten tissue of the Neungee mushroom, produces copious amounts of exopolysaccharide (EPS) in a dextrose minimal medium. This study examined the molecular characteristics and immunomodulatory activity of MK1 EPS. Methods: The EPS in the culture supernatant was purified by cold ethanol precipitation, and characterized by SDS- PAGE/silver staining and Bio-HPLC. The immunomodulatory activities of the EPS were examined using the mouse monocytic cell line, RAW 264.7 cells. Results: The molecular weights of the purified EPS were rather heterogeneous, ranging from 10.6 to 55 kDa. The EPS was composed of glucose, rhamnose, mannose, galactose, and glucosamine at an approximate molar ratio of 1.00 : 0.8 : 0.71 : 0.29 : 0.21. EPS activated the RAW cells to produce cytokines, such as TNF-${alpha}$ and IL-$1{eta}$, and nitric oxide (NO). EPS also induced the expression of co-stimulatory molecules, such as B7-1, B7-2 and ICAM-1, and increased the phagocytic activity. The macrophage-activating activity of EPS was not due to endotoxin contamination because the treatment of EPS with polymyin B did not reduce the macrophage-activating activity. Conclusion: The EPS produced from the MK1 strain exerts macrophage-activating activity.