Rheumatoid arthritis (RA) is a multi-factorial disease characterized by chronic inflammation and destruction of multiple joints. To date, various biologic treatments for RA such as anti-tumor necrosis factor alpha antibodies have been developed; however, mechanisms underlying RA development remain unclear and targeted therapy for this condition has not been established. Here, we provide evidence that signal transducer and activator of transcription 3 (Stat3) promotes inflammation and joint erosion in a mouse model of arthritis. Stat3 global KO mice show early embryonic lethality; thus, we generated viable Stat3 conditional knockout adult mice and found that they were significantly resistant to collagen-induced arthritis (CIA), the most common RA model, compared with controls. We then used an in vitro culture system to screen ninety-six existing drugs to select Stat3 inhibitors and selected five candidate inhibitors. Among them, three significantly inhibited development of arthritis and joint erosion in CIA wild-type mice. These findings suggest that Stat3 inhibitors may serve as promising drugs for RA therapy.