Imaging studies have shown that bone marrow changes occur in patients with rheumatoid arthritis (RA). To address whether bone marrow is affected in the course of arthritis, human tumor necrosis factor transgenic (hTNFtg) mice, constituting an established animal model of human RA, were examined for bone marrow changes. The hind paws (tarsal area) of 22 untreated hTNFtg mice, of five hTNFtg mice treated with anti-tumor necrosis factor (infliximab) and of five wild-type mice were examined histologically, immunohistochemically and by means of mRNA in situ hybridization. All untreated hTNFtg mice with moderate (n = 10) and severe (n = 7) disease developed inflammatory bone marrow lesions during the course of disease, whereas no such lesions appeared in hTNFtg mice with mild disease (n = 5) and in wild-type mice. Bone marrow infiltrates were almost exclusively composed of lymphocytes and the overwhelming proportion (> 80%) were B cells. The presence and extent of bone marrow infiltrates were closely linked to severity of arthritis. In addition, blockade of tumor necrosis factor effectively reduced bone marrow inflammation. Interestingly, osteoblast numbers were increased at the endosteal surface in the vicinity of these lesions. Moreover, osteoid deposition, expression of bone matrix proteins, such as osteocalcin and osteopontin, and mineralization were enhanced, suggesting that inflammatory bone marrow infiltrates induce bone formation. Indeed, B lymphocytes of these lesions expressed bone morphogenetic protein (BMP)-6 and BMP-7, which are important stimulators of new bone formation. Thus, we conclude that bone marrow actively participates in destructive arthritis by generating B-lymphocyte-rich bone marrow lesions and inducing endosteal bone formation.