The new isoxazol derivative, N-(4-Trifluoro-methylphenyl)-5-methylisoxazol-4-carboxamide (HWA 486) has been investigated as to its disease modifying activity on adjuvant arthritis of the Lewis rat. This compound was able to prevent the onset of the adjuvant disease, provided the therapy was started within the first 12 days after its induction, reflecting properties similar to that of immunosuppressive agents. If therapy started later than 12 days, the substance was still able to reduce the degree of inflammation and arrest its progress as long as it was administered, i.e. termination of the therapy, after the establishment of adjuvant arthritis, allowed the disease to progress, a property similar to classical anti-inflammatory agents such as indomethacin. The stimulation of lymphocytes from adjuvant arthritic rats with ConA, PHA, and LPS was suppressed. Treatment of these animals with HWA 486 returned the mitogenic response to normal values. However, the lymphocytes from non-diseased animals were not affected by treatment with this substance. Cyclophosphamide, on the other hand, which also can prevent the establishment of the disease, reduces the proliferative response to mitogens in healthy animals. The characteristics of HWA 486 distinguish it from either classical anti-inflammatory drugs, such as phenylbutazone, or classical immunosuppressive agents, such as cyclophosphamide.