A high-performance liquid chromatographic method was developed and validated to determine liquiritin, hesperidin, and glycyrrhizin levels in a traditional Korean medicine, Pyungwi-san (PWS). Reverse-phase chromatography using a C18 column operating at $40^{circ}C$, and photodiode array detection at 254 nm and 280 nm, were used for quantification of the three marker components of PWS. The mobile phase using gradient flow consisted of two solvent systems. Solvent A was 1.0% (v/v) aqueous acetic acid and solvent B was acetonitrile with 1.0% (v/v) acetic acid. Calibration curves were acquired with $r^2$ > 0.9999, and the relative standard deviation values (%) for intra- and inter-day precision were both less than 4.0%. The recovery of each compound was in the range 97.33-110.72%, with an relative standard deviation less than 6.0%. To provide information on the biological activity of PWS, anti-inflammatory action was evaluated. Production of nitric oxide and prostaglandin $E_2$ were measured using the Griess reagent and enzyme-linked immunosorbent assay, respectively. PWS showed inhibitory effect on prostaglandin $E_2$ production in LPS-treated RAW 264.7 cells.