Fibroblast-like synoviocytes (FLS) play an important role in the pathologic processes of destructive arthritis by producing a number of catabolic cytokines and metalloproteinases (MMPs). The expression of these mediators is controlled at the transcriptional level. The purposes of this study were to evaluate the anti-arthritic effects of magnolol (5,5'-Diallyl-biphenyl-2,2'-diol), the major bioactive component of the bark of Magnolia officinalis, by examining its inhibitory effects on inflammatory mediator secretion and the NF-κB and AP-1 activation pathways and to investigate its therapeutic effects on the development of arthritis in a rat model. The in vitro anti-arthritic activity of magnolol was tested on interleukin (IL)-1β-stimulated FLS by measuring levels of IL-6, cyclooxygenase-2, prostaglandin E(2), and matrix metalloproteinases (MMPs) by ELISA and RT-PCR. Further studies on how magnolol inhibits IL-1β-stimulated cytokine expression were performed using Western blots, reporter gene assay, electrophoretic mobility shift assay, and confocal microscope analysis. The in vivo anti-arthritic effects of magnolol were evaluated in a Mycobacterium butyricum-induced arthritis model in rats. Magnolol markedly inhibited IL-1β (10 ng/mL)-induced cytokine expression in a concentration-dependent manner (2.5-25 µg/mL). In clarifying the mechanisms involved, magnolol was found to inhibit the IL-1β-induced activation of the IKK/IκB/NF-κB and MAPKs pathways by suppressing the nuclear translocation and DNA binding activity of both transcription factors. In the animal model, magnolol (100 mg/kg) significantly inhibited paw swelling and reduced serum cytokine levels. Our results demonstrate that magnolol inhibits the development of arthritis, suggesting that it might provide a new therapeutic approach to inflammatory arthritis diseases.