Nuclear factor (NF)-κB is a key regulator of synovial inflammation. We investigated the effect of local NF-κB inhibition in rat adjuvant arthritis (AA), using the specific IκB kinase (IKK)-β blocking NF-κB essential modulator-binding domain (NBD) peptide. The effects of the NBD peptide on human fibroblast-like synoviocytes (FLS) and macrophages, as well as rheumatoid arthritis (RA) whole-tissue biopsies, were also evaluated. First, we investigated the effects of the NBD peptide on RA FLS in vitro. Subsequently, NBD peptides were administered intra-articularly into the right ankle joint of rats at the onset of disease. The severity of arthritis was monitored over time, rats were sacrificed on day 20, and tissue specimens were collected for routine histology and x-rays of the ankle joints. Human macrophages or RA synovial tissues were cultured ex vivo in the presence or absence of NBD peptides, and cytokine production was measured in the supernatant by enzyme-linked immunosorbent assay. The NBD peptide blocked interleukin (IL)-1-β-induced IκBα phosphorylation and IL-6 production in RA FLS. Intra-articular injection of the NBD peptide led to significantly reduced severity of arthritis (p < 0.0001) and reduced radiological damage (p = 0.04). This was associated with decreased synovial cellularity and reduced expression of tumor necrosis factor (TNF)-α and IL-1-β in the synovium. Incubation of human macrophages with NBD peptides resulted in 50% inhibition of IL-1-β-induced TNF-α production in the supernatant (p < 0.01). In addition, the NBD peptide decreased TNF-α-induced IL-6 production by human RA synovial tissue biopsies by approximately 42% (p < 0.01). Specific NF-κB blockade using a small peptide inhibitor of IKK-β has anti-inflammatory effects in AA and human RA synovial tissue as well as in two important cell types in the pathogenesis of RA: macrophages and FLS. These results indicate that IKK-β-targeted NF-κB blockade using the NBD peptide could offer a new approach for the local treatment of arthritis.