Papaya peels, habitually discarded as waste, have immense potential to be used as a promising source of bioactive molecules. The current study involves the identification of important phenolic compounds from papaya peels and their anti-inflammatory roles on lipopolysaccharide (LPS) stimulated RAW 264.7 macrophage cells. Papaya peel extracts (non-polar to polar solvents) were subjected to column-based chromatography followed by thin-layer chromatography for isolating and purifying the phytochemical constituents. The purified compounds were identified using FT-IR, HPLC, LC-MS, 1H and 13C NMR spectra. A total of four phenolic compounds, namely syringic acid, epicatechin, vanillic acid and cinnamic acid, were isolated from papaya peel of the Red Lady variety. In vitro anti-inflammatory activity was assessed by cyclooxygenase (COX), lipoxygenase (LOX), myeloperoxidase (MPO) and inducible nitric oxide synthase (iNOS) assays. Cinnamic acid and epicatechin exhibited the highest inhibitory activity (65–75 %), comparable to the standard drug diclofenac. Vanillic acid and syringic acid showed moderate but statistically significant inhibition (40–55 %) across the tested enzymes. All experiments were performed in triplicate (n = 3) and results were expressed as mean ± standard deviation. The findings suggest that papaya peel-derived phenolic compounds possess a multi-target anti-inflammatory mechanism and may serve as promising candidates for the treatment of chronic inflammatory disorders. Thus, papaya peel can be used for pharmaceutical purposes rather than as a throwaway waste.