Lysozyme is commonly found in spots where bacterial infections are most likely to enter the body. Earlier we found that lysozyme possesses five antimicrobial peptide motifs in its N-terminal region which can be generated by newborn pepsin. In this study, we explore the role of these peptides in the anti-inflammatory activity of lysozyme. The five peptides, helix1 (H1), helix2 (H2), H1 and H2 connected with a loop (HLH), H2 extended with either 2 β-strands (H2–S12) or 3 β-strands (H2–S13), were synthesized and examined for anti-inflammatory action. The five peptides dose-dependently decreased, to different degrees, expression of pro-inflammatory cytokines, TNF-α, IL-6 and IL-1β, in lipopolysaccharide (LPS)- or interferon-gamma (INF-γ)-stimulated mouse macrophage cells (RAW264.7). The HLH peptide and its individual helices (H1 and H2) were markedly the most potent anti-inflammatory. When macrophage cells were stimulated with live bacteria (E. coli), H1 peptide was the most powerful suppressor of TNF-α and IL-6 expression, providing evidence that the peptide is able to antagonize the pathogen-induced inflammatory response. Receptor binding assay and docking simulation provided evidence that H1 peptide bind specifically to the pocket for endotoxin binding of the toll-like receptor 4 (TLR-4) of macrophage. The results demonstrate, for the first time, the molecular basis of anti-inflammatory action of lysozyme that N-terminal helical peptides are the main contributors. This exciting finding offers new classes of therapeutic peptides with potential in the treatment of infection-induced inflammatory diseases.