Interleukin (IL)-27 is a novel cytokine of the IL-6/IL-12 family that has been reported to be involved in the pathogenesis of autoimmune diseases and has a pivotal role as both a pro- and anti-inflammatory cytokine. We investigated the in vivo effects of IL-27 on arthritis severity in a murine collagen-induced arthritis (CIA) model and its mechanism of action regarding control of regulatory T (Tregs) and IL-17-producing T helper 17 (Th17) cells. IL-27-Fc-treated CIA mice showed a lower severity of arthritis. IL-17 expression in the spleens was significantly decreased in IL-27-Fc-treated CIA mice compared with that in the CIA model. The Th17 population was decreased in the spleens of IL-27-Fc-treated CIA mice, whereas the CD4(+)CD25(+)Foxp3(+) Treg population increased. In vitro studies revealed that IL-27 inhibited IL-17 production in murine CD4(+) T cells, and the effect was associated with retinoic acid-related orphan receptor γT and signal transducer and activator of transcription 3 inhibition. In contrast, fluorescein isothiocyanate-labeled forkhead box P3 (Foxp3) and IL-10 were profoundly augmented by IL-27 treatment. Regarding the suppressive capacity of Treg cells, the proportions of CTLA-4(+) (cytotoxic T-lymphocyte antigen 4), PD-1(+) (programmed cell death protein 1) and GITR(+) (glucocorticoid-induced tumor necrosis factor receptor) Tregs increased in the spleens of IL-27-Fc-treated CIA mice. Furthermore, in vitro differentiated Treg cells with IL-27 exerted a more suppressive capacity on T-cell proliferation. We found that IL-27 acts as a reciprocal regulator of the Th17 and Treg populations in CD4(+) cells isolated from healthy human peripheral blood mononuclear cells (PBMCs), as well as from humans with rheumatoid arthritis (RA) PBMCs. Our study suggests that IL-27 has the potential to ameliorate overwhelming inflammation in patients with RA through a reciprocal regulation of Th17 and Treg cells.