Mushroom Inonotus sanghuang has been characterized as a traditional medicine in China and has pharmacological activities to treat inflammation, gastroenteric dysfunction, and cancer. Recently, we reported the impact of Inonotus sanghuang extract (ISE) from ethyl acetate fraction on bleomycin (BLM)-induced acute lung injury in mice. Here, we aimed to investigate ISE's impact on pulmonary fibrosis using in vivo and in vitro models and the underlying mechanisms. To evaluate pulmonary fibrosis, female C57BL/6 mice fed ISE (0% or 0.6% in diet) for 4 weeks were instilled intratracheally with BLM and then continued the same diet before the end of the experiment. A549 cells were used to evaluate the epithelial-mesenchymal transition (EMT). Feeding ISE improved BLM-treated mice's survival via decreasing lung infiltrating cells and fibrosis, followed by reducing hydroxyproline content, collagen deposition, and mesenchymal markers (α-SMA and vimentin) while increasing epithelial marker E-cadherin. ISE also suppressed the TGF-β expression, Smad2/3 phosphorylation, and EMT-related transcription factor Snail upon BLM instillation. Iin vitro study demonstrated that ISE inhibited TGF-β-induced EMT-like phenotype and cell behaviors, the expression of α-SMA and vimentin, and prevented E-cadherin reduction of A549 cells. Consistent with in vivo study, ISE abrogated p-Smad2/3, and Snail expression. Finally, the influence of ISE on EMT was not due to ISE toxicity. Our findings indicated that ISE effectively attenuated BLM-induced lung fibrosis. These ISE properties were thought to be involved in interfering TGF-β, Smad2/3 phosphorylation, and EMT process, suggesting that the material has the potential health benefits to improve lung fibrosis.