Tyrosine kinase 2 (TYK2) is a member of the JAK kinase family that regulates signal transduction downstream of receptors for the IL-23/IL-12 pathways and type I interferon family, where it pairs with JAK2 or JAK1, respectively. On the basis of human genetic and emerging clinical data, a selective TYK2 inhibitor provides an opportunity to treat autoimmune diseases delivering a potentially differentiated clinical profile compared to currently approved JAK inhibitors. The discovery of an ATP-competitive pyrazolopyrazinyl series of TYK2 inhibitors was accomplished through computational and structurally enabled design starting from a known kinase hinge binding motif. With understanding of PK/PD relationships, a target profile balancing TYK2 potency and selectivity over off-target JAK2 was established. Lead optimization involved modulating potency, selectivity, and ADME properties which led to the identification of the clinical candidate PF-06826647 (22).