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Rheumatoid arthritis (RA) is char – acterised with chronic inflammatory synovitis and progressive joint. Be – cause damaged and/or deformed joints cannot be repaired, a novel treatment strategy aimed at both anti-inflamma – tion and bone regeneration is a prereq – uisite. Mesenchymal stem cells (MSCs) can be easily isolated from various or – gans and possess multipotent capacity and exhibit immunoregulatory proper – ties. Using human MSC derived from bone marrow and adipose tissue, we have clarified the following novel find – ings in vitro. 1) MSCs differentiated into osteoblasts or osteocytes under os – teoblast-conditioned medium including the inflammatory stimuli such as IL-1. 2) The combination of IL-6 and solu – ble IL-6 receptor induced differentia – tion of MSCs to chondrocyte. 3) MSCs produced osteoprotegerin and inhib – ited osteoclastogenesis. Furthermore, we developed a local delivery system of MSCs by using nano-fibre scaffold. MSCs seeded on nano-fibre scaffold suppressed arthritis and joint destruc – tion by inhibiting systemic inflamma – tory reaction and immune response through the induction of regulatory T cells and subsequent reduction in the production of anti-type II collagen antibody in vivo. Thus, our data may serve as a new strategy for MSC-based therapy in inflammatory diseases and an alternative delivery method for the treatment of damaged joints in RA.