The impact of diacerein, an effective cartilage targeted therapy that is used in patients with osteoarthritis, on the development and progression of chronic inflammatory arthritis was evaluated in a tumor necrosis factor (TNF) transgenic mouse model (Tg197). The response to diacerein at 2, 20, or 60 mg/kg daily, as well as the comparative effects of other antiarthritis drugs including dexamethasone (0.5 mg/kg daily), methotrexate (1 mg/kg three times weekly) and an anti-TNF agent (5 mg/kg weekly), were assessed in the Tg197 mice. Treatment was initiated before the onset of arthritis and was continued for 5 weeks. A significant improvement in clinical symptoms was found in all three diacerein treated groups in comparison with untreated groups. Confirming these data, semiquantitative histopathologic analysis of the hind paws revealed a significant reduction not only in cartilage destruction but also in the extent of synovitis and bone erosion in diacerein treated groups in comparison with untreated groups. At the most effective dose tested (2 mg/kg daily), diacerein inhibited the onset of arthritis in 28% and attenuated the progression of arthritis in 35% of the Tg197 mice. Comparative analyses showed diacerein to be more potent than methotrexate but not as effective as dexamethasone or anti-TNF agents in suppressing the progression of the TNF mediated arthritis in this model. These results indicate that diacerein has a disease modifying effect on the onset and progression of TNF driven chronic inflammatory arthritis, suggesting that the prophylactic or therapeutic potential of diacerein in patients with RA should be further examined.