Abstract The effects of the experimental immunomodulatory agent tilomisole (Wy-18,251; (3-(p-chlorophenyl) thiazolo [3,2-a]benzimidazole-2-acetic acid) on disease development and immune function in rats with adjuvant-induced arthritis was assessed in comparison with indomethacin and levamisole. Daily p.o. administration of tilomisole (100–200 mg/kg/day) to M. butyricum-injected rats significantly reduced both edema and bone erosion in the uninjected paw. Moreover, tilomisole treatment restored to normal the diminished Con A-induced proliferative response and IL 2 synthesis observed in spleen cells from arthritic rats, but had no effect on macrophage IL 1 production. In contrast, levamisole treatment (25 mg/kg/day) of arthritic rats improved splenic immune function but did not influence paw edema or bone erosion. Conversely, indomethacin (1 mg/kg/day) significantly reduced paw edema and bone erosion but did not improve the deficient proliferative response or IL 2 synthesis by “arthritic” spleen cells. These results indicate that tilomisole possesses combined antiinflammatory and immunomodulatory activity in adjuvant-arthritic rats which is distinctly different from the effects of either indomethacin or levamisole. Moreover, these data suggest that tilomisole has potential disease-modifying activity in arthritis, which is currently being more closely examined in clinical trials.