Marine-derived extract and/or bioactive compounds have attracted increasing demand due to their unique and potential uses as cures for various inflammation-based diseases. Several studies revealed anti-inflammatory candidates found in soft corals. However, the effects of soft corals on inflammation in an in vivo model remain to be determined. Therefore, the extract of soft coral Dendronephthya puetteri (DPE) was investigated for an in vivo anti-inflammatory effect in a lipopolysaccharide (LPS)-stimulated zebrafish model to determine its potential use as a natural anti-inflammatory agent. We also investigated whether DPE has toxic effects in a zebrafish model. No significant changes were observed in terms of survival, heart beat rate, or developmental abnormalities in the zebrafish embryos exposed to a concentration below 100 µg/mL of DPE. Treating the zebrafish model with LPS-treatment significantly increased the ROS, NO generation, and cell death. However, DPE inhibited this LPS-stimulated ROS, NO generation, and cell death in a dose-dependent manner. In addition, DPE significantly reduced the mRNA expression of both iNOS and COX-2 and markedly suppressed the expression levels of the proinflammatory cytokines, TNF-α and IL-6, in an LPS-stimulated zebrafish model. These findings demonstrate that DPE has profound anti-inflammatory effect in vivo, suggesting that DPE might be a strong natural anti-inflammatory agent.