This study investigated the effect of biotransformation on anti-inflammatory activities of propolis. Propolis was dissolved with 10% ethanol and 40% polyethyleneglycol and applied ultrasonic treatment followed by Lactobacillus plantarum fermentation at 30 degrees C/48 hrs under constant agitation conditions. The in vitro anti-inflammatory activity was determined by measuring hyaluronidase and xanthine oxidase activity. Usage of PEG as a solvent and bioconversion by 8014 strain yielded high phenolic content, antioxidant, and anti-inflammatory activity. Results indicated that the anti-inflammatory activities of propolis samples are highly related to extraction methods. Optimization of extraction and biotransformation methods are subjects of further research.