Background: Psoriasis is a chronically recurrent inflammatory skin disease, modern medicine could achieve good therapeutic effect, but these treatments led to recurrence of the psoriasis, more severe symptoms due to damaging skin barrier. Traditional Chinese medicine is a useful alternative therapies. The purpose of this study was to explore the mechanism of PSORI-CM01, a Chinese medicine formula for psoriasis therapy, in eliminating psoriasis by studying its effects on inhibiting epidermal hyperplasia. Methods: Imiquimod induced psoriasis-form mice model was used to determine the efficacy of PSORICM-01 by assessing the improvement of hyperplasia in epidermal and dermal skin, cyclin B2 expression in skin was detected by immunochemistry. Human keratinocyte cell line HaCaT stimulated by LPS or not was used to research molecular mechanisms of PSORIMCM-01 as in vitro model. The inhibition of proliferation of HaCaT was determined by MTT assay, BrdU assay and real-time cell analysis (RTCA). Cell cycle distribution was detected by flow cytometry. Real-Time PCR and western blot analysis was performed to quantify the mRNA and protein expression levels, respectively. The ability of PSORICM-01 to inhibit proliferation of cyclin B2 overexpressed HaCaT cell were also investigated. Results: PSORI-CM01 significantly inhibited epidermal hyperplasia in IMQ mice lesion skin, and reduced expression of epidermis cyclin B2. Serum containing PSORI-CM01 dramatically inhibited keratinocyte HaCaT cell proliferation, no matter stimulated by LPS or not. FACS analysis showed ability of PSORICM-01 to arrest cell cycle in the G2/M phase. Additionally, PSORI-CM01 significant downregulated mRNA and protein expression of cyclin B2, and overexpression of cyclin B2 antagonized the anti-proliferative effect of PSORI-CM01 on HaCaT cells. Conclusions: PSORI-CM01 inhibits epidermal hyperplasia in imiquimod-induced mouse psoriasis-form model and reduces keratinocyte proliferation in vitro. Our results indicate that PSORI-CM01 may possess therapeutic potential for psoriasis by inhibiting keratinocyte proliferation through downregulation of cyclin B2.