Although some anti-allergic activities of the rhizome of Atractylodes japonica have been previously reported, the active principle(s) for anti-allergic action is not fully elucidated and the effect of this plant material on atopic dermatitis (AD) is not known. In this study, the 70% ethanol extract of the rhizome of A. japonica was found to significantly inhibit 5-lipoxygenase (5-LOX)- catalyzed leukotrienes (LT) production from rat basophilic leukemia (RBL)-1 cells. From the extract of A. japonica, three major sesquiterpene derivatives including atractylenolide I, atractylenolide III and eudesma-4,7-dien-8-one were successfully isolated. Among these compounds, only atractylenolide I was shown to strongly inhibit 5-LOX from RBL-1 cells ($IC_{50}$ = $18.6{mu}M$). To evaluate the effects of experimental AD, the ethanol extract of A. japonica (200 mg/day) was administered orally to hapten-treated NC/Nga mice which is an animal model of AD. It was firstly found that the extract significantly inhibited AD-like symptoms in mice, as judged by severity score and scratching behavior. Taken together, it is concluded that A. japonica possesses the inhibitory activity on 5-LOX and an animal model of AD, and atractylenolide I may contribute, at least in part, to these anti-allergic actions of A. japonica.