Background: $CD4^+Fop3^+$ regulatory T cells (Tregs) are needed to maintain peripheral tolerance, but their role in the development of autoimmune arthritis is still debated. The present study was undertaken to investigate the mechanism by which Tregs influence autoimmune arthritis, using a mouse model entitled K/BxN. Methods: We generated Treg-deficient K/BxNsf mice by congenically crossing K/BxN mice with Foxp3 mutant scurfy mice. The arthritic symptoms of the mice were clinically and histopathologically examined. The proportions and activation of $CD4^+$ T cells and/or dendritic cells were assessed in the spleens, draining lymph nodes and synovial tissue of these mice. Results: K/BxNsf mice exhibited earlier onset and more aggressive progression of arthritis than their K/BxN littermates. In particular, bone destruction associated with the influx of numerous RANKL+ cells into synovia was very prominent. They also contained more memory phenotype $CD4^+$ T cells, more Th1 and Th2 cells, and fewer Th17 cells than their control counterparts. Plasmacytoid dendritic cells expressing high levels of CD86 and CD40 were elevated in the K/BxNsf synovia. Conclusion: We conclude that Tregs oppose the progression of arthritis by inhibiting the development of $RANKL^+$ cells, homeostatically proliferating $CD4^+$ T cells, Th1, Th2 and mature plasmacytoid dendritic cells, and by inhibiting their influx into joints.