As a companion to an adiabatic version developed by Ryu and his coworkers, we have built an isothermal magnetohydrodynamic code for astrophysical flows. It is suited for the dynamical simulations of flows where cooling timescale is much shorter than dynamical timescale, as well as for turbulence and dynamo simulations in which detailed energetics are unimportant. Since a simple isothermal equation of state substitutes the energy conservation equation, the numerical schemes for isothermal flows are simpler (no contact discontinuity) than those for adiabatic flows and the resulting code is faster. Tests for shock tubes and Alfven wave decay have shown that our isothermal code has not only a good shock capturing ability, but also numerical dissipation smaller than its adiabatic analogue. As a real astrophysical application of the code, we have simulated the nonlinear three-dimensional evolution of the Parker instability. A factor of two enhancement in vertical column density has been achieved at most, and the main structures formed are sheet-like and aligned with the mean field direction. We conclude that the Parker instability alone is not a viable formation mechanism of the giant molecular clouds.