The phosphodiesterase inhibitor pentoxifylline (POX), which is known to have pharmacological effects in animal models of multiorgan failure and endotoxin‐mediated shock, was tested for its immunosuppressive potential on T lymphocyte activation in vitro and in vivo. POX was found to have a profound inhibitory effect on both mitogen‐ and antigen‐induced proliferation of CD4⁺ T cells in vitro. This inhibitory activity of the drug could be reproduced by treating T lymphocytes with cAMP analogues during stimulation. Responses of repeatedly in vitro stimulated cells were much more strongly inhibited by the drug and by cAMP analogues than responses of fresh resting lymphocytes. Furthermore, POX could drastically down‐regulate tumor necrosis factor regulate production and to a lesser extent interleukin (IL)‐2 secretion in activated T cells, but an excess of exogenous IL‐2 did not override the antiproliferative effect of the drug. In contrast, the same doses of POX had no inhibitory effect on spontaneous or induced IL‐4 and IL‐6 production by short‐term cultured T lymphocytes, indicating a selective sparing of T helper type 2 (T_h2)‐associated lymphokine functions by the drug. To test a potential use of POX as an antiinflammatory agent in T cell‐mediated autoimmune disease, the influence of POX on myelin basic protein (MBP)‐induced experimental autoimmune encephalomyelitis (EAE) was assessed. The onset of EAE in Lewis rats could almost completely be abrogated by oral administration of POX during the induction phase of disease. Lack of clinical symptoms in POX‐treated animals coincided with a marked suppression of MBP‐specific T cell reactivity in vitro, without any evidence for a generalized impairment of T cell activity. Collectively, our data suggest the potential use of xanthine derivatives of the POX type as a supporting antiinflammatory therapeutic agent in T_h1 CD4⁺ T cell‐mediated autoimmune diseases in animal models and possibly in man.