IL-17 is implicated in the pathogenesis of rheumatoid arthritis (RA) and has previously been shown to be induced by tumor necrosis factor (TNF) in vitro. The aim of this study was to assess the impact of TNF inhibition on IL-17 production in collagen-induced arthritis, a model of RA. TNF blockade using TNFR-Fc fusion protein or anti-TNF monoclonal antibody reduced arthritis severity but, unexpectedly, expanded populations of Th1 and Th17 cells, which were shown by adoptive transfer to be pathogenic. Th1 and Th17 cell populations were also expanded in collagen-immunized TNFR p55-/- but not p75 -/-mice. The expression of IL-12/IL-23 p40 was up-regulated in lymph nodes (LN) from p55-/- mice, and the expansion of Th1/Th17 cells was abrogated by blockade of p40. Treatment of macrophages with rTNF also inhibited p40 production in vitro. These findings indicate that at least one of the ways in which TNF regulates Th1/Th17 responses in arthritis is by down- regulating the expression of p40. Finally, although TNF blockade increased numbers of Th1 and Th17 cells in LN, it inhibited their accumulation in the joint, thereby providing an explanation for the paradox that anti-TNF therapy ameliorates arthritis despite increasing numbers of pathogenic T cells.