A novel artemisinin derivative, dihydroartemisinin-ursodeoxycholic acid conjugate (4), was found to exhibit strong immunosuppressive activity. Various methods were used to evaluate the immunosuppressive activity and mechanism of action of the compound to explore its potential applications. T cell proliferation, mixed lymphocyte reaction (MLR), and Th1/Th17 differentiation assays were used to evaluate the immunosuppressive activity of the compound. Differentially expressed genes from RNA sequencing were analysed with Kyoto Encyclopedia of Genes and Genomes (KEGG) pathway enrichment analysis, while enriched signalling pathways were further validated by western blotting (WB). In vivo efficacy was validated with delayed-type hypersensitivity (DTH) mouse models and dextran sodium sulphate (DSS)-induced inflammatory bowel disease (IBD) mouse model. Compound 4 inhibited concanavalin A -induced mouse splenic T cell proliferation (IC50=15nM) and anti-CD3/CD28-induced human primary T cell proliferation (IC50=30nM) while also reducing the secretion of hIFN-γ. Compound 4 exhibited similar inhibitory activity in MLR assay. Compound 4 dose-dependently inhibited human Th1/Th17 differentiation. The KEGG pathway enrichment analysis indicated that the genes related to T cell activation signalling pathways PI3K-AKT, MAPK, and NF-κB were significantly enriched. WB confirmed that compound 4 inhibited the AKT/MAPK and NF-κB signalling pathways. Compound 4 dose-dependently inhibited ear and foot pad swelling in DTH mouse models. In the DSS-induced IBD mouse model, compound 4 significantly decreased the disease activity index and colon density, and inhibited splenomegaly of the mice. The in vitro and in vivo results indicated that compound 4 has the potential to be developed into an anti-IBD drug.