Tetilla dactyloidea (Carter, 1869) is a marine sponge classified under Demospongia and recent studies have demonstrated that active constituents of Demospongia class have exhibited several potential medical applications. However, no preliminary pharmacological studies have been reported so far. The present investigation was carried out to evaluate the zoo-chemical status, antioxidant potential and anticancer activity of Crude Methanolic Extract of Tetilla dactyloidea (CMETD). Hepatocellular Carcinoma (HCC) was induced in the liver of male Sprague Dawley (SD) rats by treating with diethylnitrosamine (DEN). Nodule incidence, body weight, liver marker enzymes, enzymatic and non-enzymatic antioxidant, phase I metabolizing and liver macromolecular damaging enzymes and immuno-histopathological changes were assessed in DEN and DEN+CMETD treated rats. Oral administration of CMETD at a dose of 400mg/kg body weight to DEN treated rats restored the above parameters to near normal levels compared to control. The biochemical results were consistent with histopathological observations suggesting marked hepatoprotective effect of CMETD in a dose dependent manner. The GCMS of CMETD analysis showed the presence of six compounds. In in silico analysis 9-Octadecenoic acid (Z)-, 2-hydroxy-1-(hydroxymethyl) ethyl ester ligand showed an effective binding energy of −7.1kcal/mol against Cox-2 receptor. The compounds showed desirable pharmacokinetic properties and significant molecular interactions with the HCC receptors. To conclude, our results clearly suggested that CMETD treatment prevented liver damage, protected the antioxidant defense system and possessed anti-carcinogenic potential in DEN induced hepatic carcinoma.