【Objectives】 Mesenchymal stem cells (MSC) possess immunoregulatory ability with osteoblastogenesis which makes them an ideal tool for arthritis treatment. Here we utilized nano-fiber poly-lactic-co-glycolic acid as a scaffold to deliver MSC into arthritic models. 【Methods】 MSC were injected intra-articularly (IA) or intra-peritoneally (IP) or seeded on nano-fiber and implanted into ankles (nano-MSC) of collagen induced arthritis (CIA) rats. 【Results】 Arthritis and bone destruction were significantly suppressed by nano-MSC treatment, while IA or IP demonstrated no effects. Serum anti-type II collagen IgG and the proliferation and cytokine production of CD4+ T cells in nano-MSC rats were significantly decreased compared to control rats. Inoculation of MSC transfected with green fluorescent protein plasmid DNA showed MSC remained within nano-fiber and did not migrate to other organs. MSC cultured on nano-fiber showed increased transforming growth factor (TGF)-β1 production compared to MSC cultured on plate. 【Conclusion】 Administration of MSC with nano-fiber efficiently suppressed arthritis, bone destruction, suggesting a novel MSC delivery system for future arthritis treatment.