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Background: Artemisinin and its derivatives were reported to possess strong regulatory effects on inflammation and autoimmune diseases. This study was designed to examine the therapeutic effects and underlying mechanisms of SM934, a water-soluble artemisinin analogue, on lupus-prone female NZB × NZW F(1) mice., Methodology/principal Findings: NZB/W F(1) mice were treated orally with SM934 for 3 or 6 months respectively to investigate the effect on clinical manifestations and immunological correlates. To further explore the mechanisms of SM934, ovalbumin (OVA)-immunized or interferon (IFN)-γ-elicited C57BL/6 mice were used. In vivo, treatment with SM934 for 3 or 6 months significantly delayed the progression of glomerulonephritis and increased the survival rate of NZB/W F(1) mice. Clinical improvement was accompanied with decreased Th1-related anti-double-strand DNA (dsDNA) IgG2a and IgG3 Abs, serum interleukin (IL)-17, and increased Th2-related anti-dsDNA IgG1 Ab, serum IL-10 and IL-4. SM934 treatment also suppressed the accumulation of effector/memory T cells, induced the apoptosis of CD4(+) T cells, while enhancing the development of regulatory T cells in NZB/W F(1) mice. In addition, SM934 treatment promoted the IL-10 production of macrophages from NZB/W F(1) mice, OVA-immunized C57BL/6 mice and IFN-γ-elicited C57BL/6 mice. In vitro, SM934 enhanced IL-10 production from primary macrophages stimulated with IFN-γ., Conclusions/significance: The results of this study demonstrated that artemisinin analogue SM934 had therapeutic effects on lupus-prone female NZB/W F(1) mice by inhibiting the pathogenic helper T cell development and enhancing anti-inflammatory cytokine IL-10 production.