We have used a high throughput small molecule screen, using a fission yeast-based assay, to identify novel phosphodiesterase 7 (PDE7) inhibitors. One of the most effective hit compounds was BC12, a barbituric acid-based molecule that exhibits unusually potent immunosuppressive and immunomodulatory actions on T lymphocyte function, including inhibition of T cell proliferation and IL-2 cytokine production. BC12 treatment confers a >95% inhibition of IL-2 secretion in phytohaemagglutinin (PHA) plus phorbol-12-myristate-13-acetate (PMA) stimulated Jurkat T cells. The effect of BC12 on IL-2 secretion is not due to decreased cell viability; rather, BC12 blocks up-regulation of IL-2 transcription in activated T cells. BC12 also inhibits IL-2 secretion in human peripheral T lymphocytes stimulated in response to CD3/CD28 co-ligation or the combination of PMA and ionomycin, as well as the proliferation of primary murine T cells stimulated with PMA and ionomycin. A BC12 analog that lacks PDE7 inhibitory activity (BC12-4) displays similar biological activity, suggesting that BC12 does not act via PDE7 inhibition. To investigate the mechanism of inhibition of IL-2 production by BC12, we performed microarray analyses using unstimulated and stimulated Jurkat T cells in the presence or absence of BC12 or BC12-4. Our studies show these compounds affect the transcriptional response to stimulation and act via one or more shared targets to produce both anti-inflammatory and pro-stress effects. These results demonstrate potent immunomodulatory activity for BC12 and BC12-4 in T lymphocytes and suggest a potential clinical use as an immunotherapeutic to treat T lymphocyte-mediated diseases. 