A novel small molecule named tuftsin-phosphorylcholine (TPC), which is linked to the biological activity of helminths, was constructed. The current study address the effect of TPC treatment in established collagen-induced arthritis (CIA) mice and propose TPC bi-functional activity. TPC treatment was initiated when clinical score was 2 to 4. Arthritis scores in TPC treated mice were lower compared to mice treated with vehicle (P < 0.001). Joint staining showed normal joint structure in TPC-treated mice compared to control groups treated with phosphate buffered saline (PBS), phosphorylcholine, or tuftsin, which exhibited severely inflamed joints. TPC enhanced anti-inflammatory response due to increased IL-10 secretion, and reduced pro-inflammatory cytokine secretion (IL-1-β, IL-6, TNF-αP < 0.001). Furthermore, TPC therapy increased expansion of CD4+CD25+FOXP3+T regulatory cells and IL-10+CD5+CD1d+B regulatory cells. We propose that the immunomodulatory activity of TPC can be a result of a bi-specific activity of TPC: (a) The tuftsin part of the TPC shifts RAW macrophage cells from pro-inflammatory macrophages M1 to anti-inflammatory M2-secreting IL-10 (P < 0.001) through neuropilin-1 and (b) TPC significantly reduce mouse TLR4 expression via NFkB pathway by HEKTM cells (P < 0.02) via the phosphorylcholine site of the molecule. Our results indicate that TPC, significantly ameliorated established CIA by its immunomodulatory activity. These data could lead to a novel self bi-functional small molecule for treating patients with progressive RA.