We evaluated the therapeutic effect of secretory phospholipase A2 (sPLA2)-inhibitory peptide at a cellular level on joint erosion, cartilage destruction, and synovitis in the human tumor necrosis factor (TNF) transgenic mouse model of arthritis. Tg197 mice (N = 18) or wild-type (N = 10) mice at 4 weeks of age were given intraperitoneal doses (7.5 mg/kg) of a selective sPLA2 inhibitory peptide, P-NT.II, or a scrambled P-NT.II (negative control), three times a week for 4 weeks. Untreated Tg197 mice (N = 10) were included as controls. Pathogenesis was monitored weekly for 4 weeks by use of an arthritis score and histologic examinations. Histopathologic analysis revealed a significant reduction after P-NT.II treatment in synovitis, bone erosion, and cartilage destruction in particular. Conspicuous ultrastructural alterations seen in articular chondrocytes (vacuolated cytoplasm and loss of nuclei) and synoviocytes (disintegrating nuclei and vacuoles, synovial adhesions) of untreated or scrambled-P-NT.II-treated Tg197 mice were absent in the P-NT.II-treated Tg197 group. Histologic scoring and ultrastructural evidence suggest that the chondrocyte appears to be the target cell mainly protected by the peptide during arthritis progression in the TNF transgenic mouse model. This is the first time ultrastructural evaluation of this model has been presented. High levels of circulating sPLA2 detected in untreated Tg197 mice at age 8 weeks of age were reduced to basal levels by the peptide treatment. Attenuation of lipopolysaccharide- and TNF-induced release of prostaglandin E2 from cultured macrophage cells by P-NT.II suggests that the peptide may influence the prostaglandin-mediated inflammatory response in rheumatoid arthritis by limiting the bioavailability of arachidonic acid through sPLA2 inhibition.