Genetic mutation and pharmacological inhibition of Bruton's tyrosine kinase (Btk) both have been shown to prevent the development of collagen-induced arthritis (CIA) in mice, providing a rationale for the development of Btk inhibitors for treating rheumatoid arthritis (RA). In the present study, we characterized a novel Btk inhibitor, 6-cyclopropyl-8-fluoro-2-(2-hydroxymethyl-3-{1-methyl-5-[5-(4-methyl-piperazin-1-yl)-pyridin-2-ylamino]-6-oxo-1,6-dihydro-pyridin-3-yl}-phenyl)-2H-isoquinolin-1-one (RN486), in vitro and in rodent models of immune hypersensitivity and arthritis. We demonstrated that RN486 not only potently and selectively inhibited the Btk enzyme, but also displayed functional activities in human cell-based assays in multiple cell types, blocking Fcε receptor cross-linking-induced degranulation in mast cells (IC(50) = 2.9 nM), Fcγ receptor engagement-mediated tumor necrosis factor α production in monocytes (IC(50) = 7.0 nM), and B cell antigen receptor-induced expression of an activation marker, CD69, in B cells in whole blood (IC(50) = 21.0 nM). RN486 displayed similar functional activities in rodent models, effectively preventing type I and type III hypersensitivity responses. More importantly, RN486 produced robust anti-inflammatory and bone-protective effects in mouse CIA and rat adjuvant-induced arthritis (AIA) models. In the AIA model, RN486 inhibited both joint and systemic inflammation either alone or in combination with methotrexate, reducing both paw swelling and inflammatory markers in the blood. Together, our findings not only demonstrate that Btk plays an essential and conserved role in regulating immunoreceptor-mediated immune responses in both humans and rodents, but also provide evidence and mechanistic insights to support the development of selective Btk inhibitors as small-molecule disease-modifying drugs for RA and potentially other autoimmune diseases.