Background: The marine environment, due to its phenomenal diversity, is a rich natural source of many biologically active compounds. Objective: Marine sponge Hyrtios erectus, collected from North Bay of South Andaman Sea, was screened for potential antioxidant and anti-inflammatory activities. Materials and Methods: The antioxidant activities of the methanol (MeOH) extract of the sponge at different concentrations (0–100 μg/mL) were determined by measuring the free radical-scavenging activities. The anti-inflammatory activities of the extract were determined by measuring the inhibitory effect of the extract on albumin denaturation and inducible nitric oxide (NO) production. Quantitative real-time polymerase chain reaction was used to investigate the effect of the sponge extract on the expression of eight proinflammatory cytokine genes. Results: Our results suggested that the MeOH extract of the sponge exhibited antioxidant activity against 2,2-diphenyl-1-picrylhydrazyl-free radicals, superoxide anions, and hydroxyl radicals. More than 50% inhibition (half inhibitory concentration) was recorded with concentration of 50 μg/mL of the sponge extract. Extract of the sponge at a concentration of 25 μg/mL inhibited NO production by a macrophage cell line in vitro by 91.22% ± 5.78%. The sponge extract induced downregulation of eight proinflammatory cytokine genes in breast cancer Michigan Cancer Foundation-7 cell line. Conclusion: The secondary metabolites present in the MeOH extract of the sponge showed the potential antioxidant and anti-inflammatory activities. Further studies are required to identify the bioactive compounds.