The use of parasites or their products for treating chronic inflammation associated diseases (CIADs) has generated significant attention recently. Findings from basic and clinical research have provided valuable information on strengthening the notion that parasites’ molecules can be developed as biotherapeutic agents. Completion of the genome, secreotome, and proteome of the parasites has provided an excellent platform for screening and identifying several host immunomodulatory molecules from the parasites and evaluate their therapeutic potential for CIADs. One of the widely studied host immunomodulatory molecules of the parasites is the cysteine protease inhibitor (cystatin), which is primarily secreted by the parasites to evade host immune responses. In this review, we have attempted to summarize the findings to date on the use of helminth parasite-derived cystatin as a therapeutic agent against CIADs. Although several studies suggest a role for alternatively activated macrophages, other regulatory cells, and immunosuppressive molecules, in this immunoregulatory activity of the parasite-derived cystatin, there is still no clear demonstration as to how cystatin induces its anti-inflammatory effect in suppressing CIADs.