Summary Oat Lao‐Chao contains bioactive components such as polysaccharides, of which immunomodulatory activity is recognised as the most important biological activity of polysaccharides. This paper studied optimisation of manufacturing Oat Lao‐Chao, extraction of polysaccharide and removal of its protein, separation and purification of polysaccharide. The results showed that a water‐soluble polysaccharide coded as LCPS‐2 was isolated from Oat Lao‐Chao. The polysaccharide was homogeneous and produced an asymmetrical peak obtained by high‐performance gel permeation chromatography. Monosaccharide analysis revealed that LCPS‐2 was containing arabinose, xylose, galactose, glucose and mannose in a ratio of 1.01: 0.72: 0.76: 0.28: 0.10. The GC‐MS results of the derived alditol acetates from the permethylated LCPS‐2 showed some separate peaks corresponding to (→6)‐ Galp,(→3,6)‐Galp, terminal Ara, (→5)‐Ara, (→1)‐linked Xyl, (→3)‐Xyl and (→6)‐Glc units. NMR analysis and acid hydrolysis experiments indicated that the core structure features include a chain consisting of (1,3,6)‐linked Galp, (1,4)‐linked Galp, (1,5)‐linked Ara residues.