Bone destruction is the most difficult target in the treatment of rheumatoid arthritis (RA). Here, we report that local overexpression of IL-4, introduced by a recombinant human type 5 adenovirus vector (Ad5E1mIL-4) prevents joint damage and bone erosion in the knees of mice with collagen arthritis (CIA). No difference was noted in the course of CIA in the injected knee joints between Ad5E1mIL-4 and the control vector, but radiographic analysis revealed impressive reduction of joint erosion and more compact bone structure in the Ad5E1mIL-4 group. Although severe inflammation persisted in treated mice, Ad5E1mIL-4 prevented bone erosion and diminished tartrate-resistant acid phosphatase (TRAP) activity, indicating that local IL-4 inhibits the formation of osteoclast-like cells. Messenger RNA levels of IL-17, IL-12, and cathepsin K in the synovial tissue were suppressed, as were IL-6 and IL-12 protein production. Osteoprotegerin ligand (OPGL) expression was markedly suppressed by local IL-4, but no loss of OPG expression was noted with Ad5E1mIL-4 treatment. Finally, in in vitro studies, bone samples of patients with arthritis revealed consistent suppression by IL-4 of type I collagen breakdown. IL-4 also enhanced synthesis of type I procollagen, suggesting that it promoted tissue repair. These findings may have significant implications for the prevention of bone erosion in arthritis.