Proteoglycan-induced arthritis is a mouse model displaying many similarities to human rheumatoid arthritis and ankylosing spondylitis which has been documented by clinical and histopathological studies. The development of the disease in genetically susceptible BALB/c mice is dependent upon the expression of both cell-mediated and humoral immunity to host mouse cartilage proteoglycan. Since both development and regression of acute inflammatory processes in joints correlate directly with the serum antibody level to mouse cartilage proteoglycan, it is believed that these autoreactive antibodies may play a key role in the pathological mechanism of proteoglycan-induced arthritis. The treatment of arthritic animals with an immunomodulating agent (leflunomide) suppressed acute inflammatory events, protected animals from new inflammatory episodes or acute exacerbations in chronically inflamed joints and blocked pathological processes in arthritic joints, which otherwise led to progressive deformities, ankylosis and the loss of articular cartilage. We conclude that the suppressive effect of leflunomide (HWA 486) in proteoglycan-induced arthritis primarily is due to the suppression of autoantibody formation and that the drug may be a potential agent in human therapy as well. Further, we feel that this novel model of murine polyarthritis will extend further the pharmacological repertoire necessary to discover innovative antirheumatic drugs.