We investigated the therapeutic potential and mechanism of action of IFN-beta protein for the treatment of rheumatoid arthritis (RA). Collagen-induced arthritis was induced in DBA/1 mice. At the first clinical sign of disease, mice were given daily injections of recombinant mouse IFN-beta or saline for 7 days. Disease progression was monitored by visual clinical scoring and measurement of paw swelling. Inflammation and joint destruction were assessed histologically 8 days after the onset of arthritis. Proteoglycan depletion was determined by safranin O staining. Expression of cytokines, receptor activator of NF-kappaB ligand, and c-Fos was evaluated immunohistochemically. The IL-1-induced expression of IL-6, IL-8, and granulocyte/macrophage-colony-stimulating factor (GM-CSF) was studied by ELISA in supernatant of RA and osteoarthritis fibroblast-like synoviocytes incubated with IFN-beta. We also examined the effect of IFN-beta on NF-kappaB activity. IFN-beta, at 0.25 microg/injection and higher, significantly reduced disease severity in two experiments, each using 8-10 mice per treatment group. IFN-beta-treated animals displayed significantly less cartilage and bone destruction than controls, paralleled by a decreased number of positive cells of two gene products required for osteoclastogenesis, receptor activator of NF-kappaB ligand and c-Fos. Tumor necrosis factor alpha and IL-6 expression were significantly reduced, while IL-10 production was increased after IFN-beta treatment. IFN-beta reduced expression of IL-6, IL-8, and GM-CSF in RA and osteoarthritis fibroblast-like synoviocytes, correlating with reduced NF-kappaB activity. The data support the view that IFN-beta is a potential therapy for RA that might help to diminish both joint inflammation and destruction by cytokine modulation.