Phenolic compounds from field-grown Inonotus obliquus sclerotia (Chaga) consist mainly of hispidin analogs and melanins, and are thought to be the active constituents to treat several human diseases. In submerged cultures of the fungus, however, no information is currently available on the production of phenolic compounds and their corresponding pharmacological functions. In this study, phenolic compounds from Chaga and submerged cultures of the fungus were assayed for their composition and immune-stimulating effects. Phenolic compounds produced by I. obliquus in submerged cultures mostly consist of flavonoids, together with small amounts of hispidin analogs and melanins. This is quite contrary to the situation in Chaga, where flavonoids are determined as trace elements. Furthermore, phenolic compounds from Chaga show capacity about two-fold higher than those produced in submerged cultures in inhibiting cyclophosphamide-induced reduction of bodyweight, spleen index and viability of peripheral lymphocytes in test mice. Thus less production of hispidin analogs and melanins is likely to be responsible for less immune-stimulating effects in phenolic compounds from submerged cultures, and additional factors should be imposed during submerged cultures of I. obliquus to regulate biosynthesis of phenolic compounds directed to the composition similar to Chaga.