IL-10 is a potent immunoregulatory cytokine attenuating a wide range of immune effector and inflammatory responses. In the present study, we assess whether endogenous levels of IL-10 function to regulate the incidence and severity of collagen-induced arthritis. DBA/1 wildtype (WT), heterozygous (IL-10+/-) and homozygous (IL-10-/-) IL-10-deficient mice were immunized with type II collagen. Development of arthritis was monitored over time, and collagen-specific cytokine production and anticollagen antibodies were assessed. Arthritis developed progressively in mice immunized with collagen, and 100% of the WT, IL-10+/-, and IL-10-/- mice were arthritic at 35 days. However, the severity of arthritis in the IL-10-/- mice was significantly greater than that in WT or IL-1+/- animals. Disease severity was associated with reduced IFN-gamma levels and a dramatic increase in CD11b-positive macrophages. Paradoxically, both the IgG1 and IgG2a anticollagen antibody responses were also significantly reduced. These data demonstrate that IL-10 is capable of controlling disease severity through a mechanism that involves IFN-gamma. Since IL-10 levels are elevated in rheumatoid arthritis synovial fluid, these findings may have relevance to rheumatoid arthritis.