Background: Indigo naturalis (IND) is an herbal medicine that has been used as an anti-inflammatory agent to treat diseases including dermatitis and inflammatory bowel disease in China. However, the mechanism by which IND exerts its immunomodulatory effect is not well understood. Methods: A murine model of dermatitis and inflammatory bowel disease, both induced by oxazolone (OXA), was treated with IND. The severity of dermatitis was evaluated based on ear thickness measurements and histological scoring. The severity of colitis was evaluated by measuring body weight, histological scoring, and endoscopic scoring. The expression of inflammatory cytokines in ear and colon tissue was evaluated using real-time PCR. 16S rRNA DNA sequencing of feces from OXA-induced colitis mice was performed before and after IND treatment. The effects of IND on OXA-induced colitis were also evaluated after depleting the gut flora with antibiotics to test whether alteration of the gut flora by IND influenced the course of intestinal inflammation in this model. Results: IND treatment ameliorated OXA dermatitis with a reduction in IL-4 and eosinophil recruitment. However, OXA colitis was significantly aggravated in spite of a reduction in intestinal IL-13, a pivotal cytokine in the induction of the colitis. It was found that IND dramatically altered the gut flora and IND no longer exacerbated colitis when colitis was induced after gut flora depletion. Conclusions: Our data suggest that IND could modify the inflammatory immune response in multiple ways, either directly (i.e., modification of the allergic immune cell activity) or indirectly (i.e., alteration of commensal compositions).