The development of biological therapies has improved management of rheumatoid arthritis. However, costs and unresponsiveness to therapy in a sizeable proportion of patients limit their use, making it imperative to identify new targets for drug development programs. Here we investigated the melanocortin-receptor type 3 (MC(3)) pathway. Gene-deficient mice were subjected to a model of serum-transfer-induced arthritis and joints analyzed for gene expression (cytokines, MCs) and morphology. Pharmacological analyses were also conducted in this model. Osteoclastogenesis was studied from bone marrow cells. Mc(3)(-/-) mice displayed an exacerbated inflammatory arthritis, associated with prominent bone erosion and higher articular expression of Rankl. Osteoclastogenesis studied from Mc(3)(-/-) bone marrow cells revealed a higher degree of responsiveness to Rankl, linked to prolonged NF-κB activation compared to wild types. Up-regulation of a discrete set of inflammatory genes, including Il-1β, Il-6, and Nos2, was measured in Mc(3)(-/-) mice, and a marked up-regulation of joint Mc(3) accompanied arthritis resolution in wild-type mice. Administration of an MC(3) agonist, D[Trp8]-γ-MSH, attenuated disease incidence and severity in wild-type but not Mc(3)(-/-) mice. Overall, these findings identify MC(3)-mediated signaling as a beneficial pathway in experimental arthritis; hence this receptor is a novel target for the development of therapeutics for arthritis.