Infection with the highly pathogenic avian influenza H5N1 virus results in a high incidence of mortality in humans. Severe complications from infection are often associated with hypercytokinemia. However, current neuraminidase inhibitors (NAIs) have several limitations including the appearance of oseltamivir-resistant H5N1 virus and the inability to completely ameliorate hyper-immune responses. To overcome these limitations, we evaluated the anti-viral activity of mycophenolic mofetil (MMF) against A/Vietnam/1194/2004 (H5N1) virus infection using MDCK cells and mice. The IC50 of MMF (0.94 μM) was comparable to that of zanamivir (0.87 μM) in H5N1 virus-infected MDCK cells based on ELISA. Time-course assays demonstrated that MMF completely inhibited H5N1 viral mRNA replication and protein expression for approximately 8 h after the initiation of treatment. In addition, MMF treatment protected 100% of mice, and lung viral titers were substantially reduced. The anti-viral mechanism of MMF against H5N1 virus infection was further confirmed to depend on the inhibition of cellular inosine monophosphate dehydrogenase (IMPDH) by exogenous guanosine, which inhibits viral mRNA and protein expression. Moreover, IL-1β, IFN-β, IL-6, and IP-10 mRNA expression levels were significantly downregulated in MDCK cells with MMF treatment. These results indicated that MMF could represent a novel inhibitor of viral replication and a potent immunomodulator for the treatment of H5N1 virus infection.