A polysaccharide, Ci-3, resembling isolichenan except with a much higher degree of polymerization, has been isolated from the water extract, as well as from the alkali extract, of the lichen Cetraria islandica (L.) using ethanol fractionation, dialysis, ion-exchange chromatography and gel filtration. The mean M(r) of Ci-3 was determined to be 2000 kD, compared to 6-8 kD reported for isolichenan. The structure of Ci-3 was elucidated and found to be composed of (1-->3)- and (1-->4)-alpha-D-glucopyranosyl units in the ratio of 2:1, using methanolysis, methylation analysis, optical rotation and NMR spectroscopy. The immunomodulating activity of Ci-3 was tested in an in vitro phagocytosis assay and anti-complementary, and proved to be active in both tests.