Background and Purpose Immunosuppressive drugs have shown great promise in treating autoimmune diseases in recent years. A series of novel oxazole derivatives were screened for their immunosuppressive activity. PO‐322 1H‐indole‐2,3‐dione 3‐(1,3‐benzoxazol‐2‐ylhydrazone) was identified as the most effective of these compounds. Here, we have investigated the mechanism(s) underlying the inhibition of T‐cell proliferation in vitro by PO‐322, as well as its effects on the delayed‐type hypersensitivity (DTH) response and imiquimod‐induced dermatitis in vivo. Experimental Approach T‐cell proliferation and apoptosis were analysed with flow cytometry. Cell viability was assessed with a CCK‐8 assay. Protein kinase activity was assessed by SelectScreen Kinase Profiling Services. The phosphorylation of signal‐regulated molecules was measured by Western blot. Cytokine levels were determined by elisa. The effect of PO‐322 on DTH and imiquimod‐induced dermatitis was evaluated in BALB/c mice. Key Results PO‐322 inhibited human T‐cell proliferation with anti‐CD3/anti‐CD28 mAbs or alloantigen without significant cytotoxicity. Importantly, PO‐322 was a selective inhibitor of the serum‐ and glucocorticoid‐regulated kinase 1 (SGK1) and decreased NDRG1 phosphorylation but not p70S6K, STAT5, Akt, or ERK1/2 phosphorylation. Furthermore, PO‐322 inhibited IFN‐γ, IL‐6, and IL‐17 expression but not IL‐10 expression. Finally, treatment with PO‐322 was safe and effective for ameliorating the DTH response and imiquimod‐induced dermatitis in mice. Conclusions and Implications PO‐322 exerted immunosuppressive activity in vitro and in vivo by selectively inhibiting SGK1 activity. PO‐322 represents a potential lead compound for the design and development of new drugs for the treatment of autoimmune diseases.