Tyrosine kinase 2 (TYK2) as a member of Janus kinase (JAK) family, mainly mediates the signaling of type I interferons (IFN), interleukin-12 (IL-12) and interleukin-23 (IL-23), which has become an attractive target for treatment of immune and inflammatory diseases. However, the development of selective TYK2 inhibitors is challenging due to the high homology of the catalytic kinase domain among the JAK family members. Here, we report a novel and potent allosteric inhibitor, WD-890, which binds to the pseudokinase domain of TYK2 with high selectivity and inhibits its function. We accomplished a series of preclinical studies to demonstrate the therapeutic efficacy of WD-890 in four animal models: systemic lupus erythematosus (SLE), psoriasis, psoriatic arthritis (PsA), and inflammatory bowel disease (IBD). The pharmacokinetic and toxicology results further indicate that WD-890 has favorable absorption, distribution, metabolism, and excretion (ADME) properties and tolerable toxicity. In conclusion, our study shows that WD-890 could be a promising oral TYK2 inhibitor for future treatment of autoimmune diseases.