The transcription factor serum amyloid A-activating factor-1 (SAF-1) has been identified as a regulator of a number of cellular genes. To assess the pleiotropic role of SAF-1 in vivo, we generated SAF-1 transgenic mice, in which CMV immediate-early promoter was used to direct expression of the SAF-1 transgene in multiple organs. Our study shows that overexpression of SAF-1 predisposes animals to arthritis. Although SAF-1 transgenic mice do not spontaneously develop arthritis, they develop a severe form of arthritis when challenged with the Lyme disease agent Borrelia burgdorferi, which is known to promote arthritis development in both humans and mice. CMV-SAF-1 transgenic mice, upon B. burgdorferi infection, showed increased joint swelling and synovial inflammation compared with nontransgenic littermates. Immunohistochemical analysis of joint tissues collected 21 days after B. burgdorferi infection revealed colocalization of matrix metalloproteinase-1, a degradative enzyme that destroys type II collagen, a major architectural component of articular cartilage, and SAF-1 in both SAF-1 transgenic and nontransgenic mice. Further analysis by RNase protection assay and Western immunoblot demonstrated the presence of higher levels of matrix metalloproteinase-1 and SAF-1 in the inflamed joints of SAF-1 transgenic mice compared with their levels in nontransgenic mice. Consistent with these findings, reduced levels of proteoglycans were detected in the inflamed joint cartilage of transgenic mice, indicating damage to the cartilage structure. Together these results suggest a role of SAF-1 in the pathogenesis of inflammation-induced arthritis.