Red onion scales (ROS) contain large amounts of flavonoids that are responsible for the reported antioxidant activity, immune enhancement, and anticancer property. Atypical prostatic hyperplasia (APH) was induced in adult castrated Wistar rats by both s.c. injection of testosterone (0.5 mg/rat/day) and by smearing citral on shaved skin once every 3 days for 30 days. Saw palmetto (100 mg/kg) as a positive control and ROS suspension at doses of 75, 150, and 300 mg/kg/day were given orally every day for 30 days. All medications were started 7 days after castration and along with testosterone and citral. The HPLC profile of ROS methanolic extract displayed two major peaks identified as quercetin and quercetin-4'-β-O-D-glucoside. Histopathological examination of APH-induced prostatic rats revealed evidence of hyperplasia and inflammation with cellular proliferation and reduced apoptosis Immunohistochemistry showed increased tissue expressions of IL-6, IL-8, TNF-α, IGF-1, and clusterin, while TGF-β1 was decreased, which correlates with the presence of inflammation. Both saw palmetto and RO scale treatment have ameliorated these changes. These ameliorative effects were more evident in RO scale groups and were dose dependent. In conclusion, methanolic extract of ROS showed a protective effect against APH induced rats that may be attributed to potential anti-inflammatory and immunomodulatory effects.