Expressed strongly by myeloid cells, damage-associated molecular pattern (DAMP) proteins S100A8 and S100A9 are found in the serum of patients with infectious and autoimmune diseases. Compared to S100A9, the role of S100A8 is controversial. We investigated its biological activity in collagen-induced arthritis using the first known viable and fertile S100a8-deficient (S100a8-/-) mouse. Although comparable to the wild type (WT) in terms of lymphocyte distribution in blood and in the primary and secondary lymphoid organs, S100a8-/- mice had increased numbers of neutrophils, monocytes and dendritic cells in the blood and bone marrow, and these all expressed myeloid markers such as CD11b, Ly6G and CD86 more strongly. Granulocyte-macrophage common precursors were increased in S100a8-/- bone marrow and yielded greater numbers of macrophages and dendritic cells in culture. The animals also developed more severe arthritic disease leading to aggravated osteoclast activity and bone destruction. These findings were correlated with increased inflammatory cell infiltration and cytokine secretion in the paws. This study suggests that S100A8 is an anti-inflammatory DAMP that regulates myeloid cell differentiation, thereby mitigating the development of experimental arthritis.