Transferring collagen-pulsed, bone marrow-derived dendritic cells (DCs) into congenic DBA/1 recipient mice produced arthritis in joints adjacent to the site of DC transfer and could be inhibited by treatment with TNF antagonists. Disease was Ag specific, as transfer of control, unpulsed DCs, or DCs pulsed with OVA did not produce arthritis. In contrast to other experimental arthritis models, DC-induced arthritis localized to the site of injection and did not spontaneously generalize to uninvolved joints, despite the demonstration of circulating collagen-reactive T cells. Similarly, transfer of T cells primed by collagen/DCs was not sufficient to produce arthritis in recipient mice. In collagen/DC-primed mice however, disease could be induced in uninvolved joints by local administration of noncollagen-pulsed DCs and this could be reduced through TNF inhibition. Similarly, injection of collagen/DC-primed mice with low-dose TNF also resulted in local induction of arthritis, as did administration of TNF to mice receiving T cells from collagen/DC but not OVA/DC-primed mice. Thus, we have demonstrated for the first time that administration of collagen-pulsed mature DCs is sufficient for the induction of arthritis. Furthermore, this disease process is mediated through both adaptive and innate effects of DCs; first, priming of autoreactive T cells and, second, induction of local inflammation via mediators such as TNF.