Collagen-induced arthritis in DBA/1 mice is a model of rheumatoid arthritis with marked synovitis and erosions. The disease can be adoptively transferred to SCID mice with arthritogenic splenocytes from DBA/1 mice injected with bovine collagen type II. However, infection of arthritogenic splenocytes with a retrovirus expressing TGF beta 1 inhibits development of arthritis in SCID mice. When DBA/1 mice, at onset of arthritis have additional arthritogenic splenocytes transferred, exacerbation occurs, reflected in a rapid increase in the number of arthritic joints, increased paw swelling and higher levels of anti-collagen antibody. By infecting arthritogenic splenocytes ex vivo with TGF beta 1 retrovirus, this exacerbation was inhibited. TGF beta 1 was effective in lowering inflammation of joints with already established arthritis and inhibiting the spreading of the disease to other joints. Transient reduction in anti-collagen antibody levels could also be obtained using purified T cells infected with TGF beta 1 retrovirus. In addition, expression of TGF beta 1 in lymphocytes reduced the levels of gelatinase (MMP2) activity in inflamed joints.