The aerial parts of Artemisia capillaris Thunberg (Compositae) have been used in Chinese medicine as a liver protective agent, diuretic, and for amelioration of skin inflammatory conditions. This study was conducted to establish the scientific rationale for treating skin inflammation and to find active principles from A. capillaris. To accomplish these goals, the 70% ethanol extract of the aerial parts of A. capillaris (AR) was prepared and its 5-lipoxygenase (5-LOX) inhibitory action was studied since 5-LOX products are known to be involved in several allergic and skin inflammatory disorders. AR showed potent inhibitory activity against 5-LOX-catalyzed leukotriene production by ionophore-induced rat basophilic leukemia-1 cells, with an $IC_{50}$ of $<1.0{mu}g/mL$. Nine major compounds, scopoletin, scopolin, scoparone, esculetin, quercetin, capillarisin, isorhamnetin, 3-O-robinobioside, isorhamnetin 3-O-galactoside and chlorogenic acid, were isolated from A. capillaris, and their effects were examined to identify the active principle(s). Several coumarin and flavonoid derivatives were found to be 5-LOX inhibitors. In particular, esculetin and quercetin were potent inhibitors, with $IC_{50}$ values of 6.6 and $0.7{mu}M$, respectively. Against arachidonic acid-induced ear edema in mice, AR, and esculetin strongly inhibited edematic response. AR and esculetin also inhibited delayed-type hypersensitivity response in mice. In conclusion, AR and some of their major constituents are 5-LOX inhibitors, and these in vitro and in vivo activities may contribute to the therapeutic potential of AR in skin inflammatory disorders in traditional medicine.