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Many cytokines associated with autoimmune disorders and inflammation have been shown to activate the signalling kinase JAK3, implying that JAK3 plays key roles in the pathogenesis of these diseases. Therefore, investigating the alterations of JAK3 activity and the efficacy of selective JAK3 antagonists in animal models of such disorders is essential to a better understanding of the biology of JAK3 and to assess the potential clinical benefits of JAK3 inhibitors.Through high-throughput cell-based screening using the NCI compound library, we identified NSC163088 (berberine chloride) as a novel inhibitor of JAK3. Specificity and efficacy of this compound were investigated in both cellular and animal models.We show that berberine chloride has selectivity for JAK3 over other JAK kinase members, as well as over other oncogenic kinases such as Src, in various cellular assays. Biochemical and modelling studies strongly suggested that berberine chloride bound directly to the kinase domain of JAK3. Also phospho-JAK3 levels were significantly increased in the synovial tissues of rat joints with acute inflammation, and the treatment of these rats with berberine chloride decreased JAK3 phosphorylation and suppressed the inflammatory responses.The up-regulation of JAK3/STATs was closely correlated with acute arthritic inflammation and that inhibition of JAK3 activity by JAK3 antagonists, such as berberine chloride, alleviated the inflammation in vivo.