In this study, the effect of (Boc-Lys (Boc)-Arg-Asp-Ser (tBu)-OtBu), a tetrapeptide derivative (PEP1261) was examined for antiproliferative potency and apoptotic induction. Synovial fibroblasts were isolated from collagen-induced arthritic (CIA) rats and exposed to peptides viz., PEP1261, and parental peptides (KRDS and RGDS). Viability of the cells decreased in the presence of PEP1261 at a lower concentration (0.1 mM) when compared to RGDS and KRDS (1 mM). The treatment of cells with peptides showed induction of apoptosis, resulting in the cleavage of caspase-3 as well as its substrate poly-(ADP-ribose) polymerase (PARP). Pretreatment of cells with caspase-3 inhibitor prevented inhibition of [(3)H] thymidine incorporation, DNA fragmentation, and cleavage of caspase-3 and PARP as confirmed by western blotting as well as annexin-V/PI-staining using flow cytometry. However, caspase-1 and caspase-2 inhibitors did not prevent the peptides from inducing apoptosis indicating that caspase-3 might have a role in the process of apoptosis induced by peptides. Treatment of synovial fibroblasts with nitric oxide donor, S-nitroso-N-acetyl-DL: -penicillamine (SNAP) (500 microM) showed significant elevation of nitric oxide levels and resulted in absence of apoptosis by preventing the inhibition of [(3)H] thymidine incorporation. This was further evidenced by annexin V/propidium iodide (PI) staining and absence of DNA fragmentation, intra cellular caspase-3 activity and PARP cleavage. In contrast, SNAP followed by PEP1261 and parental peptides-induced apoptosis by lowering the levels of nitric oxide. These results suggested that PEP1261 suppressed the proliferation and induced apoptosis in cultured synovial fibroblasts from CIA rats. This study also confirmed that PEP1261 inhibited nitric oxide level in cultured synovial fibroblasts.