The concept of substrate inhibition to prevent its phosphorylation has potential in drug discovery and is envisioned to treat the autoimmune disorder multiple sclerosis (MS). Glia maturation factor- (GMF-) Ser83 phosphorylation by protein kinase A (PKA) is pivotal in the activation of GMF–p38MAPK-NFB biochemical pathway towards proinflammatory response induction in experimental autoimmune encephalomyelitis (EAE). Using structure-based drug design, we identified the small molecule inhibitor 1-H-indazole-4yl methanol (GMFBI.1) that specifically blocked Ser83 phosphorylation site on GMF- substrate. Using in vitro and in vivo techniques, molecular mechanism of action of GMFBI.1’s direct interaction with GMF- substrate and prevention of its Ser83 phosphorylation was established. GMFBI.1 down regulated p38MAPK phosphorylation and NFB expression essential for proinflammatory response. Further, GMFBI.1 administration at peak of EAE reversed clinical symptoms, immunopathology, proinflammatory cytokine response and up regulated the anti-inflammatory cytokines. Present strategy of substrate inhibition against the key immunomodulatory target has immense therapeutic potential in MS.