Orthogonal experiment was used to optimize the extraction conditions of Flammulina velutipes mycelia polysaccharides (FvP). Four independent variables (ratio of water to raw material, initial pH value, extracting temperature, and extracting time) were taken into consideration. A yield of FvP of 2.19% was obtained under an optimized condition (ratio of water to material of 50:1, initial pH value of 6.0, extracting temperature of 85°C, and extracting time of 6 h). Subsequently, antioxidative properties of FvP-2 (crude polysaccharides) and FvP-3 (deproteinized polysaccharides) prepared from F. velutipes mycelia were evaluated by monitoring the 2,2-diphenyl-1-picrylhydrazyl (DPPH) free radical and hydroxyl radical scavenging activity, together with antitumor activity against the human hepatocellular carcinoma BEL-7402 cells. DPPH scavenging rate of 65.85% and hydroxyl radical scavenging rate of 71.24% were obtained at 200 μg/mL of FvP-3. The inhibition rate of BEL-7402 cells was up to 45% at 640 μg/mL of FvP-2. These results suggested that FvP possesses potent antioxidant and antitumor properties. The polysaccharide may be useful as a functional food additive and an antioxidant and antitumor agent.