To evaluate the immune regulatory and anti-fibrosis function of thalidomide (Thal) in systemic sclerosis (SSc), we investigated the effects of Thal on: (a) Th17 and Treg cell production; (b) related factors expression; and (c) transforming growth factor (TGF)-β1/Smad3 pathway, using a mouse model of SSc. Forty female BALB/c mice were randomly divided into a normal control (NC) group, SSc group (bleomycin [BLM]-induced experimental SSc), BLM+Thal (10mg/kg/day) group, BLM+Thal (20) group, and BLM+Thal (30) group. Thal was administered a day after BLM. At the end of the animal experiments, mouse tissues were collected for detection of pathological changes and hydroxyproline content. Flow cytometry, real-time polymerase chain reaction, enzyme-linked immunosorbent assay, immunohistochemistry, Western blot and other methods were used to measure Th17, Treg cell population and their related factors, as well as TGF-β1/Smad3 pathway expression. Thal treatment: (a) reduced skin, and pulmonary tissue fibrosis, inflammation score, and hydroxyproline content (P<.001) in BLM-induced SSc mice; (b) reduced the percentages of Th17 cells and associated interleukin (IL)-17A expression (both P<.05) but increased the percentages of Treg cells and its transcription factor Foxp3 expression (both P<.05); (c) correlation analysis found positive correlations between Th17/Treg ratio, the inflammatory score of the skin and pulmonary tissues, hydroxyproline content, and type I collagen messenger RNA expression (r=.8546, .8656, .6902, .6807, .8118, and .8424, respectively, P<.01); (d) Thal inhibited TGF-β1 expression and Smad3 phosphorylation (both P<.05); (e) TGF-β1 was positively correlated with the IL-17A and Th17/Treg ratio (r=.5856, P=.005; r=.6684, P=.0107, respectively). Thal can effectively prevent skin and pulmonary tissue fibrosis in a mouse model of SSc through the TGF-β1/Smad3 signaling pathway and can rectify the distortion of the Th17/Treg balance in SSc by potentially regulating Th17 and Treg cell production, as well as their related factors expression.