Tumor necrosis factor alpha (TNFalpha) plays a pivotal role in the pathogenesis of rheumatoid arthritis (RA). Blockage of TNFalpha actions by systemic administration of TNF antagonists has recently been shown to ameliorate joint symptoms in RA patients. In the present study, a streptococcal cell wall (SCW)-induced rat arthritis model was used to evaluate the effect of different gene transfer routes of a TNF antagonist on the development and severity of arthritis. Successful delivery of a plasmid DNA encoding a rat TNF receptor-immunoglobulin Fc (TNFR:Fc) fusion gene prompted the subsequent administration of a recombinant adeno-associated virus (rAAV) vector encoding the antagonist, either locally (intraarticular) or systemically (intramuscular). The TNFR:Fc gene, delivered by either route, resulted in profound suppression of the arthritis as reflected in decreased inflammatory cell infiltration, pannus formation, cartilage and bone destruction, and mRNA expression of joint proinflammatory cytokines. Increased bioactive serum TNFR levels were detected as a result of rAAV-ratTNFR:Fc administration, concomitant with a decrease in circulating TNFalpha. Administration of the rAAV-ratTNFR:Fc vector to one joint also suppressed arthritis in the contralateral joint. Importantly, intraarticular administration resulted in significantly lower systemic distribution of the gene product. Hence, the use of rAAV as the delivery vector for TNFR:Fc effectively suppressed SCW-induced arthritis and may provide an approach for local delivery of antiarthritic therapy.