Retinoic acid is the active vitamin A derivative and is well-known to have diverse immunomodulatory actions. In this study, we investigated the impact of all-trans retinoic acid (ATRA), a biologic key metabolite of vitamin A, on the development of arthritis and the pathophysiologic mechanisms by which ATRA might have antiarthritic effects in animal model of rheumatoid arthritis (RA; collagen-induced arthritis [CIA] in DBA/1J mice). We showed that treatment with ATRA markedly suppressed the clinical and histologic signs of arthritis in the CIA mice. It reduced the expression of IL-17 in the arthritic joints. Interestingly, Foxp3(+) regulatory T cells were markedly increased and IL-17-producing CD4(+) T cells (Th17 cells) were decreased in the spleens of ATRA-treated mice. In vitro treatment with ATRA induced the expression of Foxp3 and repressed the IL-17 expression in the CD4(+) T cells in mice. ATRA suppressed the production of total IgG and IgG2a in splenocytes that were stimulated by LPS. It also reduced serum levels of total IgG and IgG2 anti-collagen Abs and germinal center formation in CIA mice. In addition, the ATRA-treated mice showed decreased osteoclast formation in arthritic joints. Moreover, ATRA downregulated the expression of receptor activator of NF-κB ligand, the leading player of osteoclastogenesis, in the CD4(+) T cells and fibroblast-like synoviocytes from patients with RA. Furthermore, ATRA prevented both human monocytes and mice bone marrow-derived monocytes/macrophage cells from differentiating into osteoclasts. These data suggest ATRA might be an effective treatment modality for RA patients.