Allium cepa (Family Liliaceae) is a reputed Indian medicinal herb that is prescribed as an effective remedy for several ailments in the Ayurvedic system of medicine. The aim of this study was to evaluate its efficacy against various events responsible for Type I allergic reactions. A herbal fraction (ALC-02) from A. cepa (bulb) inhibited histamine release and attenuated intracellular calcium levels in Compound 48/80-induced rat peritoneal mast cells. It also prevented Compound 48/80-mediated systemic anaphylaxis while lowering histamine levels in plasma. ALC-02 suppressed carrageenan-induced rat paw edema. It inhibited eosinophil peroxidase activity and protein content in bronchoalveolar lavage fluid (BALF) of ovalbumin-challenged mice. In this experiment ALC-02 also caused a substantial reduction in lipid peroxidation in BALF/lung tissue and augmented superoxide dismutase activity in lung tissue. ALC-02 suppressed erythrocytic lysis caused by Triton X-100. A significant quenching of 1,1-diphenyl-2-picrylhydrazyl radical by ALC-02 was observed. The results have shown a promising anti-allergic profile of ALC-02 that could be attributed to its potential antihistaminic, anti-inflammatory, and antioxidant activities.