Sjögren's syndrome (SS) dry eye can cause ocular surface inflammation and lacrimal gland (LG) damage, leading to discomfort and potential vision problems. The existing treatment options for SS dry eye are currently constrained. We investigated the possible therapeutic effect and the underlying mechanism of AS101 in autoimmune dry eye. AS101 was injected subconjunctivally into a rabbit model of autoimmune dacryoadenitis and its therapeutic effects were determined by evaluating clinical and histological scores. The expressions of effector T cells (Teff)/regulatory T cells (Treg)-related transcription factors and cytokines, inflammation mediators, and transcription factor NFATc2 were measured by quantitative real-time PCR and/or Western blot both in vivo and in vitro. Additionally, the role of NFATc2 in the immunomodulatory effects of AS101 on T cells was explored by co-culturing activated peripheral blood lymphocytes (PBLs) transfected with NFATc2 overexpression lentiviral plasmid with AS101. AS101 treatment potently ameliorated the clinical severity and reduced the inflammation of LG. Further investigation revealed that AS101 treatment led to decreased expression of Th1-related genes (T-bet and IFN-γ) and Th17-related genes (RORC, IL-17A, IL-17F, and GM-CSF) and increased expression of Treg-related gene Foxp3 in vivo and in vitro. Meanwhile, AS101 suppressed the expression of TNF-α, IL-1β, IL-23, IL-6, MMP-2, and MMP-9. Mechanistically, AS101 downregulated the expression of NFATc2 in inflamed LGs. Overexpression of NFATc2 in activated PBLs partially blunted the effect of AS101 on Teff suppression and Treg promotion. In conclusion, AS101 is a potential regulator of Teff/Treg cell balance and could be an effective treatment agent for SS dry eye.