Cytokines, growth factors, and other chemical messengers rely on a class of intracellular nonreceptor tyrosine kinases known as Janus kinases (JAKs) to rapidly transduce intracellular signals. A number of these cytokines are critical for lymphocyte development and mediating immune responses. JAK3 is of particular interest due to its importance in immune function and its expression, which is largely confined to lymphocytes, thus limiting the potential impact of JAK3 inhibition on nonimmune physiology. The aim of this study was to evaluate the potency and selectivity of the investigational JAK3 inhibitor VX-509 (decernotinib) [(R)-2-((2-(1H-pyrrolo[2,3-b]pyridin-3-yl)pyrimidin-4-yl)amino)-2-methyl-N-(2,2,2-trifluoroethyl)butanamide] against JAK3 kinase activity and inhibition of JAK3-mediated signaling in vitro and JAK3-dependent physiologic processes in vivo. These results demonstrate that VX-509 potently inhibits JAK3 in enzyme assays (K_i = 2.5 nM + 0.7 nM) and cellular assays dependent on JAK3 activity (IC₅₀ range, 50–170 nM), with limited or no measurable potency against other JAK isotypes or non-JAK kinases. VX-509 also showed activity in two animal models of aberrant immune function. VX-509 treatment resulted in dose-dependent reduction in ankle swelling and paw weight and improved paw histopathology scores in the rat collagen-induced arthritis model. In a mouse model of oxazolone-induced delayed-type hypersensitivity, VX-509 reduced the T cell–mediated inflammatory response in skin. These findings demonstrate that VX-509 is a selective and potent inhibitor of JAK3 in vitro and modulates proinflammatory response in models of immune-mediated diseases, such as collagen-induced arthritis and delayed-type hypersensitivity. The data support evaluation of VX-509 for treatment of patients with autoimmune and inflammatory diseases such as rheumatoid arthritis.