Janus tyrosine kinases (JAKs) are cytoplasmic protein tyrosine kinases that play a crucial role in the initial steps of cytokine signaling. JAK3, a member of JAK kinase family of four (JAK1, JAK2, JAK3 and TYK2), is abundantly expressed in lymphoid cells. JAK3 has been found to initiate signaling of interleukin (IL)-2, IL-4, IL-7, IL-9, IL-13 and IL-15. Indispensable role of JAK3 in lymphocyte development and function has been revealed recently. Because of the involvement of JAK3 in T cell activation and proliferation, and the documented genetic evidence for the role of JAK3 in autoimmune or transplant -induced inflammatory disorders, the selective targeting of JAK3 in T cells may potentially be clinically beneficial in T cell-derived pathologic disorders. In this review we discuss inhibitors of JAK3 as a new class of immunomodulatory agents with immunosuppressive, anti-inflammatory, anti-allergic, and anti-leukemic properties. Preclinical data from multiple experimental model systems of autoimmune diabetes, allergy, solid organ transplantation, pancreatic islet transplantation and bone marrow transplantation are discussed in the context of the clinical need for new immunomodulatory agents with such properties.