A new phthalimido compound, N-[2-(2-phthalimidoethoxy)acetyl]-L-alanyl-D-glutamic acid (CAS 142489-47-2, LK 423), was examined for its possible activity to modulate levels and species of cytokines in mice carrying a specific inflamed organ. Colonic inflammation was induced in mice by giving 5% dextran sulfate sodium (DSS) solution as drinking water. The capacity of spleen cells obtained from the DSS-inflamed mice to produce interleukin-10 (IL-10) in response to mitogen was significantly reduced when compared with the capacity of spleen cells from intact mice. Treatment of the mice administered DSS by subcutaneous multiple injections with a low dose of LK423 resulted in delaying the progression to full-blown inflammation in the colon. The mitogen-stimulated spleen cells obtained from the LK423-treated mice yielded significantly greater amounts of IL-10 and IL-6 than the untreated DSS group, and the peritoneal cells from the LK423-treated mice produced significantly lower levels of tumor necrosis factor alpha (TNF alpha). Based on this prophylactic effect of LK423 in the murine colitis model, its therapeutic effect was examined in rats in which colitis had been induced by feeding 3% DSS for 12 days. Intracolonic administration of LK423 to these rats for 7 days resulted in diminishing the ulcerative area in the colon. The immunological characteristics of this new compound are discussed from the point of view of its possible application as a therapeutic agent for inflammatory bowel diseases (IBD) and other inflammatory diseases.