The calcium-dependent enzyme tissue transglutaminase (tTG) is associated with diverse biological functions, such as induction of apoptosis, modeling of the extracellular matrix, receptor-mediated endocytosis, cell growth and differentiation, cell adhesion and signal transduction. Also, it may deamidate glutamine residues to glutamic acid and catalyze cross-linking of proteins. In this study, we have investigated the impact of tTG for posttranslational modifications and cross-linking of the immunodominant T-cell epitope CII260-270 and their effects on the collagen-induced arthritis, an animal model for rheumatoid arthritis. By using mass spectrometry analysis and hybridoma assays, we have demonstrated that tTG could perform both types of modifications (deamidation and cross-link formation) on the immunodominant T-cell epitope CII259-273. Replacement of the glutamine at position 267 with glutamic acid leads to a decreased binding affinity to MHC II. T cells recognized both non-modfied (Q(267)) and modified (E(267)) CII259-273-peptides. We also show that administration of tTG leads to increased incidence, severity and histopathological manifestations of collagen-induced arthritis in mice. Moreover, we conclude that both processes, deamidation and cross-linking, are involved in the tTG-catalyzed reactions, and in vivo administration of tTG enhances arthritis severity and joint destruction in mice.