IL-6-mediated STAT3 signaling is essential for Th17 differentiation and plays a central role in the pathogenesis of rheumatoid arthritis. To investigate the molecular mechanism underlying the antirheumatic effects and T cell regulatory effects of STAT3 inhibition, we studied the effects of the JAK 2 inhibitor AG490 on Th17 cell/regulatory T cell (Treg) balance and osteoclastogenesis. AG490 was administered to mice with collagen-induced arthritis (CIA) via i.p. injection, and its in vivo effects were determined. Differential expression of proinflammatory cytokines, including IL-17A, IL-1β, and IL-6, was analyzed by immunohistochemistry. Levels of phosphorylated STAT3 and STAT5 and differentiation of Th17 cells and Tregs after AG490 treatment in our CIA model were analyzed by immunostaining. In vitro development of Th17 cells and Tregs was analyzed by flow cytometry and real-time PCR. AG490 ameliorated the arthritic phenotype in CIA and increased the proportion of Foxp3(+) Tregs. In contrast, the proportion of IL-17A-producing T cells and levels of inflammatory markers were reduced in AG490-treated mice. Numbers of p-STAT3(+) CD4(+) T cells and p-STAT5(+) CD4(+) T cells were reduced and elevated, respectively, after treatment with AG490. Furthermore, AG490 markedly increased the expression of molecules associated with Treg development (ICOS, programmed cell death protein 1, ICAM-1, and CD103). The development and function of osteoclasts were suppressed by AG490 treatment. Our results suggest that AG490, specifically regulating the JAK2/STAT3 pathway, may be a promising treatment for rheumatoid arthritis.