Background: Polysaccharide biology, whose core is the structure, function, and edible value of polysaccharides, is regarded as the last great scientific frontier outside the field of protein and nucleic acid research. Materials and Methods: In this study, highperformance gelpermeation chromatography, high-performance liquid chromatography, gas chromatography–mass spectrometry, and nuclear magnetic resonance analysis were performed to identify the structure of a new polysaccharide isolated from Lyophyllum decastes (Fr.) Sing (LDS-1). The anticancer and immunomodulatory ability of the polysaccharides (LDS-1) was also investigated. Results: The results showed that the average molecular weight of LDS-1 was 8681 Da, and the ratio between glucose and galactose was 2:1. Structural analysis revealed four (1 →4)-α-D-Glcp moieties with branches at 6-O position, and the branches consisted of two (1 →6)-β-D–Galp moieties. Our results showed that LDS-1 exhibits immunological activity. At a concentration ranging from 2.5 to 25 μg/mL, LDS-1 could distinctly promote the growth of T lymphocyte, B lymphocyte, and RAW264.7 cells; increase the secretion of IgA, IgD, IgE, IgG, IgM, tumor necrosis factor (TNF)-α, TNF-β, and interleukin-2, and enhance the phagocytotic activity of RAW264.7 cells to phagocytize fluorescent microspheres, when compared with the blank control group (P < 0.01). Furthermore, under in vitro conditions, LDS-1 (2.5-20 μg/mL) exhibited significant antineoplastic activity (P < 0.01) against colon cancer cells (CT26.WT) and S180 cells when compared with the blank control group. However, the inhibition effect was different. The research for antineoplastic activity of LDS-1 in vivo indicated that the tumor inhibition rate was 54.32%. Conclusion: In conclusion, the polysaccharides of LDS-1 exhibited good biological activities, which shows that it can be used as an immunomodulator and an antitumor agent.