In the present study, the inhibitory effect of neem leaf extract (NLE) on lipopolysaccaride (LPS)-induced nitric oxide (NO) and tumor necrosis factor-${alpha}$ (TNF-${alpha}$) production was examined both in vitro and in vivo. In vitro study revealed that NLE treatment ($100{mu}g/ml$) inhibits LPS (100 ng/ml)-induced NO production by 96% and TNF-${alpha}$ production by 32%. The reduction in NO production is probably conferred by the complete suppression of inducible nitric oxide synthase (iNOS) expression. Interestingly, in vivo NLE significantly improved the survival rate of mice in an experimental sepsis model. Administration of NLE (100 mg/kg) 24 h before LPS treatment (20 mg/kg) improved the survival rate of mice by 60%. The inhibition of plasma NO and TNF-${alpha}$ production by NLE is likely to account for the improved survival of mice. Our results suggest that NLE may present a promising avenue in the development of therapeutic agents for the treatment of inflammatory diseases.