TYK2 is a nonreceptor tyrosine kinase involved in adaptive and innate immune responses. A deactivating coding variant has previously been shown to prevent receptor-stimulated activation of this kinase and provides high protection from several common autoimmune diseases but without immunodeficiency. An agent that recapitulates the phenotype of this deactivating coding variant may therefore represent an important advancement in the treatment of autoimmunity. BMS-986165 is a potent oral agent that similarly blocks receptor-stimulated activation of TYK2 allosterically and with high selectivity and potency afforded through optimized binding to a regulatory domain of the protein. Signaling and functional responses in human T_H17, T_H1, B cells, and myeloid cells integral to autoimmunity were blocked by BMS-986165, both in vitro and in vivo in a phase 1 clinical trial. BMS-986165 demonstrated robust efficacy, consistent with blockade of multiple autoimmune pathways, in murine models of lupus nephritis and inflammatory bowel disease, supporting its therapeutic potential for multiple immune-mediated diseases.