Medicinally, sandalwood oil (SO) has been attributed with antiinflammatory properties; however, mechanism(s) for this activity have not been elucidated. To examine how SOs affect inflammation, cytokine antibody arrays and enzyme‐linked immunosorbent assays were used to assess changes in production of cytokines and chemokines by co‐cultured human dermal fibroblasts and neo‐epidermal keratinocytes exposed to lipopolysaccharides and SOs from Western Australian and East Indian sandalwood trees or to the primary SO components, α‐santalol and β‐santalol. Lipopolysaccharides stimulated the release of 26 cytokines and chemokines, 20 of which were substantially suppressed by simultaneous exposure to either of the two sandalwood essential oils and to ibuprofen. The increased activity of East Indian SO correlated with increased santalol concentrations. Purified α‐santalol and β‐santalol equivalently suppressed production of five indicator cytokines/chemokines at concentrations proportional to the santalol concentrations of the oils. Purified α‐santalol and β‐santalol also suppressed lipopolysaccharide‐induced production of the arachidonic acid metabolites, prostaglandin E2, and thromboxane B2, by the skin cell co‐cultures. The ability of SOs to mimic ibuprofen non‐steroidal antiinflammatory drugs that act by inhibiting cyclooxygenases suggests a possible mechanism for the observed antiinflammatory properties of topically applied SOs and provides a rationale for use in products requiring antiinflammatory effects. Copyright © 2013 John Wiley & Sons, Ltd.