Autoimmune diseases represent a heterogeneous group of disorders arising from aberrant immune recognition of self-antigens, culminating in sustained inflammation and progressive tissue destruction. Conditions such as rheumatoid arthritis, systemic lupus erythematosus, and multiple sclerosis collectively affect over 5% of the global population, imposing substantial morbidity and socioeconomic burden. Current therapeutic strategies, including corticosteroids, disease-modifying antirheumatic drugs (DMARDs), and biological agents, offer symptomatic relief but are frequently limited by systemic immunosuppression, opportunistic infections, and long-term toxicities. Herbal drugs, derived from diverse botanical sources, have garnered increasing scientific attention as adjunctive or alternative therapeutic candidates owing to their multi-target pharmacological profiles. This review systematically examines the immunomodulatory potential of herbal compounds—encompassing flavonoids, alkaloids, terpenoids, and polysaccharides—in the context of autoimmune pathophysiology. Mechanistically, these phytochemicals attenuate pro-inflammatory cytokine cascades (including TNF-α, IL-6, and IL-17), suppress NF-κB and JAK-STAT signaling pathways, modulate regulatory T cell and Th17 cell balance, and reduce autoantibody production. Preclinical data from murine models of collagen-induced arthritis, experimental autoimmune encephalomyelitis, and lupus-prone strains demonstrate compelling efficacy. Emerging clinical evidence supports the therapeutic relevance of compounds such as curcumin, berberine, and tripterygium glycosides, although challenges in bioavailability, standardization, and rigorous trial design persist. This review underscores the translational potential of herbal pharmacotherapy and advocates for integrative frameworks combining traditional knowledge with evidence-based medicine to advance novel immunomodulatory therapies for autoimmune diseases.