Inonotus obliquus, a wild wood-decay fungus which grows on Betula trees in cool climates, has a variety of biological activities that the scientific community is paying more and more attention to. However, the research work is moving at a snail's pace. The methods of strain identification and the hypha microstructure have not been reported. We isolated one strain of filamentous molds from fruit body which was collected from birch wood on Changbai Mountain, cultivated mycelia on an inclined plane, and examined its micromorphology based on macroscopic examination. The strain was identified as I. obliquus by sequencing its ITS (internal transcribed spacer) domain. We subsequently investigated some of the mycelium polysaccharides' biological activities. The strain used in this study as the producers of antioxidation and anticancer polysaccharides was LNUF008. After fermentation in a 30-L fermenter, mycelia were obtained. The polysaccharides were extracted by transonic recirculation and ethanol precipitation. In order to identify the antioxidation effect, we designed an assay to test the inhibition of endogenous and Fe2+-Cys-induced lipid peroxidation as well as ferrous sulfate/ascorbate (Fe2+-VC)-induced mitochondrial swelling. The MTT [3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide] method was used to study the antiproliferation activity of the polysaccharides on SMMC7721 hepatoma cells. The results indicate that I. obliquus polysaccharides exhibit high antitumor and antioxidation effects. The submerged culture method of growing I. obliquus will enable large-scale production of the polysaccharides.