Arimisia annua L. is an important anticancer herb used in traditional Chinese medicine. The molecular basis underpinning the anticancer activity is complex and not fully understood, but the herbal polysaccharides, broadly recognised as having immunomodulatory, antioxidant and anticancer activities, are potential key active agents. To examine the functions of polysaccharides from A. annua, their immunomodulatory and antioxidant potentials were evaluated, as well as their structural characterization. The water-soluble polysaccharides (AAPs) were fractionated using size-exclusion chromatography to obtain three dominant fractions, AAP-1, AAP-2 and AAP-3, having molecular masses centered around 1684, 455 and 5.8kDa, respectively. The antioxidant potentials of the isolated polysaccharides were evaluated by measuring radical scavenging activities against DPPH● (2,2-diphenyl-1-picrylhydrazyl radical), ABTS●+ (2,2′-azino-bis (3-ethylbenzothiazoline-6-sulphonic acid radical ion), and the OH● (hydroxyl radical). AAP-1 displayed high antioxidant activities against these radicals, which were 68%, 73% and 78%, respectively. AAP-2 displayed lower scavenging activities than the other two fractions. Immunostimulatory activities of AAPs were measured using mouse macrophages. The three polysaccharide fractions displayed significant antioxidant activities and stimulated the production of tumor necrosis factor-α (TNF-α) and interleukin-6 (IL-6). AAP-1 showed significant immunostimulatory activity (16-fold increase in the production of IL-6 compared to the control and 13-fold increase in the production of TNF-α) with low toxicity (>60% cell viability at 125 μg/mL concentration). Preliminary structural characterization of the AAPs was carried out using gas chromatography (GC) and FTIR techniques. The results indicate that AAP-1 and AAP-2 are pyranose-containing polysaccharides with β-linkages, and AAP-3 is a β-fructofuranoside. The results suggest that these polysaccharides are potential candidates for immunotherapy and cancer treatment.