Helminth‐derived products have recently been shown to prevent the development of inflammatory diseases in mouse models. However, most identified immunomodulators from helminthes are mixtures or macromolecules with potentially immunogenic side effects. We previously identified an immunomodulatory peptide called SJMHE1 from the HSP60 protein of Schistosoma japonicum. In this study, we assessed the ability of SJMHE1 to affect murine splenocytes and human peripheral blood mononuclear cells (PBMCs) stimulated by toll‐like receptor (TLR) ligands in vitro and its treatment effect on mice with collagen‐induced arthritis (CIA). We show that SJMHE1 not only modulates the cytokine production of murine macrophage (MΦ) and dendritic cell but also affects cytokine production upon coculturing with allogeneic CD4+ T cell. SJMHE1 potently inhibits the cytokine response to TLR ligands lipopolysaccharide (LPS), CpG oligodeoxynucleotides (CpG) or resiquimod (R848) from mouse splenocytes, and human PBMCs stimulated by LPS. Furthermore, SJMHE1 suppressed clinical signs of CIA in mice and blocked joint erosion progression. This effect was mediated by downregulation of key cytokines involved in the pathogenesis of CIA, such as interferon‐γ (IFN‐γ), tumour necrosis factor‐α (TNF‐α), interleukin (IL)‐6, IL‐17, and IL‐22 and up‐regulation of the inhibitory cytokine IL‐10, Tgf‐β1
mRNA, and CD4+
CD25+Foxp3+ Tregs. This study provides new evidence that the peptide from S. japonicum, which is the ‘safe’ selective generation of small molecule peptide that has evolved during host–parasite interactions, is of great value in the search for novel anti‐inflammatory agents and therapeutic targets for autoimmune diseases.