The topical application of essential oils is considered an effective treatment for skin diseases. Cymbopogon distans (Nees ex Steud.) Wats (Poaceae) is a promising aromatic grass widespread in the Himalayan temperate zone. Therefore, using in-vitro and in-vivo bioassays, we examined the chemical and pharmacological characteristics of essential oil hydro-distilled from C. distans coded as CDA-01, specifically concerning skin inflammation. Characterization using GC-FID and GC-MS provided a chemical fingerprint for CDA-01, enabling the identification of 54 compounds; amongst them, citral (34.3%), geranyl acetate (21.2%), and geraniol (16.4%) were the most abundant. To examine the anti-inflammatory potential, CDA-01 treatment on LPS-stimulated macrophage cells in addition to 12-O-tetradecanoylphorbol-13-acetate (TPA) generated cutaneous inflammatory reaction in the mouse ear was assessed through quantification of the inflammatory markers. Consequently, CDA-01 demonstrated protection against inflammation caused by LPS by lowering the pro-inflammatory cytokines (IL-6 and TNF-α) level in HaCaT cells with negligible cytotoxicity. Consistent with the in-vitro findings, CDA-01 treatment reduced pro-inflammatory mediators (TNF-, IL-6, and NO) and lipid peroxidation in an in-vivo investigation. Subcutaneous inflammation in TPA-treated mice ears was similarly decreased, as evidenced by the histological and morphological studies. As a result of our findings, it is possible that CDA-01 could be an effective treatment for skin inflammation disorders.