Abstract Increased numbers of macrophages (MΦs) is an early hallmark of active arthritis. Expression of IL-23R has been identified on myeloid cells. We determined if IL-23 can regulate the pathogenesis of collagen II-induced arthritis (CIA) by directly modulating development of MΦs. AdIL-17 was injected to Il23p19-/- and Il23p19+/+ mice to induce equal levels of IL-17 yet Il23p19-/-mice were more resistant to CIA compared to Il23p19+/+ mice. Dramatic expansion of IL-23R+ MΦs, which are the major producers of IL-6 and TNFα in the draining LN of mice with CIA, occurred only in Il23p19+/+ but not Il23p19-/- mice. IL-23 suppressed the expression of anti-inflammatory TGFβ and IL-10 produced by M2 MΦs and promoted expression of inflammatory IL-6 and TNFα produced by M1 MΦs in vitro. IL-23 prevents the ability of M-CSF to promote development of anti-inflammatory M2 MΦs by inducing the expression of Irf5, an M1 specific transcription factor. Using GFP-Foxp3 reporter mice, accumulation of Foxp3+ Tregs were only observed in Il23p19-/- but not Il23p19+/+ mice with CIA. Coculture of IL-23 stimulated MΦs with naïve CD4 T cells prevented the development and function of Treg cells, which could be reversed in the presence of anti-IL-6. Our results suggest that IL-23 induces the expression of IRF5 and promotes M1 MΦs that perpetuate the development of CIA. One important function of IL-23-activated MΦs was to prevent the development of Treg cells via an IL-6 dependent mechanism.