Regulatory T cells (Treg) play a critical role to control immune responses and to prevent autoimmunity, thus selective increase of Treg cells in vivo has broad therapeutic implications for autoimmune and inflammatory diseases. Licorice is a well-known herbal medicine used worldwide for over thousands of years, and accumulating evidence has shown its immunomodulatory potential. However, it is not clear whether licorice could regulate the induction and function of Treg cells. Here we found licorice extract could promote Treg cell induction, and then we used a rational approach to isolate its functional fractions and constituents. The results showed that two constituents, isoliquiritigenin and naringenin, promoted Treg cell induction both in vitro and in vivo. The effective fractions and two constituents of licorice also enhanced immune suppression of Treg cells, and they further reduced severity of DSS-induced colitis in mice. This study suggested that promotion of regulatory T cell induction could be an underlying mechanism of the historically and widely used herbal medicine licorice, providing its two effective molecules against autoimmune and inflammatory diseases.