In recent years, high numbers of research focusing on secondary metabolites produced by terrestrial bacteria towards anti-inflammatory properties but, minority of them used bacteria associated to marine organism. In this study, 25 bacteria colonies were isolated from sponge Theonella sp. which was collected from Bidong Island, Terengganu. Cytotoxicity and anti-inflammatory activity of secondary metabolites produced by these bacteria were studied using macrophage cell lines: RAW 264.7 .Macrophage plays a role in mammalian immune system by providing defense against a foreign harmful substance for example Lipopolysaccharides (LPS) which induces production of pro-inflammatory mediators such as nitric oxide (NO). Inhibition of NO production in LPS stimulated RAW 264.7 cells is highly established assay to screen for anti-inflammatory activity. All isolates were cultured and supernatants were collected for the extraction of secondary metabolites using diaion HP-20 to obtain crude extracts. Evaluations of the cytotoxicity effect of the extracts on RAW 264.7 were done using MTT assay. The highest concentration sample producing lowest toxicity effect was used for anti-inflammatory assay. Macrophages were induced with LPS before treated with different concentrations of crude metabolites in anti-inflammatory assay. The effects of crude secondary metabolites extracted to the induced macrophage were monitored by observing the inhibition level of Nitric Oxide (NO) released by RAW 264.7 into supernatant and estimated from nitrate standard curve. A preliminary assay revealed that isolate label with TM1.8 and TM 1.9 possesses anti-inflammatory activities of 112.06% and 109.7% respectively for every 1ug/L sample. The result suggested that these two crude extracts were more effective in inhibiting NO production compared to positive control N-Monomethyl-L-arginine Monoacetate (L-NMMA) which showed an inhibitory activity at 87.41% for every 1ug/L sample.