Objectives: The clinical efficacy of many multiherbal Traditional Chinese Medicines (TCM) is partially attributable to their immunoregulatory properties. In this study we evaluated the effect of eight commonly used, commercially available multiherbal Chinese medicines on T-cell activation. We focused on Yin Zhi Huang (YZH, an injectable herbal medicine commonly used for the treatment of liver diseases in China), because it was the most potent inhibitor of T-cell activation in our experimental system. The effects of 10 ingredient components of YZH were also evaluated. Methods: [3H] thymidine incorporation assay was used to assess mouse T-cell proliferation after stimulation with latex beads coated with anti-CD3/CD28 antibodies. CD25, CD69, PD-1, and I-COS expression by purified mouse CD4+ T cells treated with plate-bound anti-CD3 antibody and soluble anti-CD28 antibody was analyzed by fluorescent-activated cell sorter (FACS). Cytokine/chemokine production by human peripheral blood mononuclear cells (PBMC) stimulated with staphylococcal enterotoxin B (SEB) was determined by enzyme-linked immunosorbent assay (ELISA). Results: Among tested herbal medicines, YZH was the most potent inhibitor of T-cell activation. In splenocyte proliferation assays, the inhibitory effect of YZH was dose-dependent, with a 50% inhibition concentration (IC50) of 1:3200–1:1600. Ten (10) purified compounds found in YZH were evaluated for their activity. Among them, ursolic acid (1–10 μmol), luteolin (1–10 μmol), baicalein (1–10 μmol), scopran (5–50 μmol), and crocin (5–50 μmol), exhibited dose-dependent inhibition. YZH also inhibited CD25, CD69, PD-1, and ICOS expression by stimulated mouse CD4+ T cells. In human PBMCs, YZH inhibited SEB-stimulated cytokine (interleukin [IL]-1, IL-2, IL-6, tumor necrosis factor[TNF]-α, interferon [IFN]-γ) and chemokine (IP-10, MCP-1, MIP-1α and MIP-1β) production in a dose-dependent manner. Conclusion: Our data show for the first time that YZH is a potent inhibitor of T-cell activation, and this property may be the major mechanism underlying the clinical efficacy of YZH. Our experimental results pave the way for identification of active component(s) and/or analysis of synergistic/additive effect of a YZH ingredient in future studies.