An exopolysaccharide, from a new Arctic permafrost isolate, Sphingobacterium sp. IITKGP-BTPF3 was purified and characterized. Upon optimization of various parameters (pH, temperature, carbon and nitrogen source), the yield of EPS obtained was 1.42g/L. Structural investigation through FT-IR, GC–MS/MS, HPLC and NMR (1D and 2D) revealed the molecule to be a mannan with α-(1→2) and α-(1→6) linkages. Anti-oxidant and macrophage immunomodulatory assays were employed for the assessment of bioactivity. Sphingobactan was found to be capable of scavenging superoxide anions, and reducing the nitric oxide production in LPS elicited murine macrophage (RAW 264.7) cell line. The in vitro findings indicate the potential of Sphingobactan as a biological response modification (BRM) agent, for containment and possible resolution of inflammatory response in vivo.