Yeast is an integral part of mammalian microbiome, and like commensal bacteria, has the potential of being harnessed to influence immunity in clinical settings. However, functional specificities of yeast-derived immunoregulatory molecules remain elusive. Here we find that while under steady state, β-1,3-glucan-containing polysaccharides potentiate pro-inflammatory properties, a relatively less abundant class of cell surface polysaccharides, dubbed mannan/β-1,6-glucan-containing polysaccharides (MGCP), is capable of exerting potent anti-inflammatory effects to the immune system. MGCP, in contrast to previously identified microbial cell surface polysaccharides, through a Dectin1-Cox2 signaling axis in dendritic cells, facilitates regulatory T (Treg) cell induction from naïve T cells. Furthermore, through a TLR2-dependent mechanism, it restrains Th1 differentiation of effector T cells by suppressing IFN-γ expression. As a result, administration of MGCP display robust suppressive capacity towards experimental inflammatory disease models of colitis and experimental autoimmune encephalomyelitis (EAE) in mice, thereby highlighting its potential therapeutic utility against clinically relevant autoimmune diseases.