Fibroblast-like synoviocytes (FLS) are major contributors to joint inflammation in rheumatoid arthritis (RA). Forkhead box O 3 (FOXO3) perturbations in immune cells are increasingly linked to RA pathogenesis. Here, we show that FOXO3 is distinctly inactivated/phosphorylated in the FLS of rheumatoid synovitis. In vitro, stimulation of FLS with tumor necrosis factor-alpha α (TNFα) induced a rapid and sustained inactivation of FOXO3. mRNA profiling revealed that the inactivation of FOXO3 is important for the sustained pro-inflammatory interferon response to TNFα (CXCL9, CXCL10, CXCL11, and TNFSF18). Mechanistically, our studies demonstrate that the inactivation of FOXO3 results from TNF-induced downregulation of phosphoinositide-3-kinase-interacting protein 1 (PIK3IP1). Thus, we identified FOXO3 and its modulator PIK3IP1 as a critical regulatory circuit for the inflammatory response of the resident mesenchymal cells to TNFα and contribute insight into how the synovial tissue brings about chronic inflammation that is driven by TNFα.