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Objective: It has been reported that ADAMTS‐12 is a susceptibility gene for rheumatoid arthritis (RA) development, and its level is significantly increased in RA patients. In addition, ADAMTS‐12 is reported to be required for inflammation in otherwise healthy subjects. This study was undertaken to determine the role of ADAMTS‐12 and the underlying mechanisms in the pathogenesis of inflammatory arthritis. Methods: The collagen‐induced arthritis (CIA) model was established in ADAMTS‐12–deficient mice and their control littermates to determine the role of ADAMTS‐12 in vivo. Micro–computed tomography scanning was used to demonstrate the destruction of the ankle joint; histologic analysis illustrated synovitis, pannus formation, and bone and cartilage destruction; enzyme‐linked immunosorbent assay was performed to measure serum levels of inflammatory cytokines; and protein–protein interaction assays were performed to detect the interactions of ADAMTS‐12 and its various deletion mutants with connective tissue growth factor (CTGF). Results: Deficiency of ADAMTS‐12 led to accelerated inflammatory arthritis in the CIA mouse model. Loss of ADAMTS‐12 caused enhanced osteoclastogenesis. In vitro and in vivo protein–protein interaction assays demonstrated that ADAMTS‐12 bound and processed CTGF, a previously unrecognized substrate of ADAMTS‐12. In addition, deletion of ADAMTS‐12 enhanced, while overexpression of ADMATS‐12 reduced, CTGF‐mediated inflammation. Furthermore, ADAMTS‐12 regulation of inflammation was largely lost in CTGF‐deficient macrophages. Importantly, blocking of CTGF attenuated elevated inflammatory arthritis seen in the ADAMTS‐12–deficient CIA mouse model. Conclusion: This study provides evidence that ADAMTS‐12 is a critical regulator of inflammatory arthritis and that this is mediated, at least in part, through control of CTGF turnover. [ABSTRACT FROM AUTHOR]