Rheumatoid arthritis (RA) is an autoimmune disease characterized by inflammatory bone destruction in which tumor necrosis factor alpha (TNF-α) plays a key role. Bovine lactoferrin (bLF) is a multifunctional protein with anti-inflammatory and immunomodulatory properties. This study aimed to clarify the inhibitory effects of bLF on the pathological progression of RA. The mannan-induced arthritis model in SKG mice (genetic RA model) was used. Orally applied liposomal bLF (LbLF) markedly reduced ankle joint swelling and bone destruction. Histologically, pannus formation and osteoclastic bone destruction were prevented in the LbLF-treated animals. Moreover, orally administered LbLF improved the balance between Th17 cells and regulatory T cells isolated from the spleen of mannan-treated SKG mice. In an in vitro study, the anti-inflammatory effects of bLF on TNF-α-induced TNF-α production and downstream signaling pathways were analyzed in human synovial fibroblasts from RA patients (RASFs). bLF suppressed TNF-α production from RASFs by inhibiting the nuclear factor kappa B and mitogen-activated protein kinase pathways. The intracellular accumulation of bLF in RASFs increased in an applied bLF dose-dependent manner. Knockdown of the lipoprotein receptor-related protein-1 (LRP1) siRNA gene reduced bLF expression in RASFs, indicating that exogenously applied bLF was mainly internalized through LRP-1. Immunoprecipitated proteins with anti-TNF receptor-associated factor 2 (TRAF2; an adapter protein/ubiquitin ligase) included bLF, indicating that bLF binds directly to the TRAF2-TRADD-RIP complex. This indicates that LbLF may effectively prevent the pathological progression of RA by suppressing TNF-α production by binding to the TRAF2-TRADD-RIP complex from the RASFs in the pannus. Therefore, supplemental administration of LbLF may have a beneficial effect on preventive/therapeutic reagents for RA.