Oxymatrine (OMT), a monosomic alkaloid extracted from the Chinese herb, Sophora flavescens Ait, has long been used as a traditional Chinese medicine for the treatment of inflammatory diseases. The aim of the present study was to investigate the potential anti-inflammatory effect of OMT, and its modulation on imbalance between regulatory T (Treg) cells and T helper (Th) 17 cells in rats with collagen-induced arthritis (CIA). Sprague-Dawley rats were immunized with type II collagen and following a second collagen immunization, the rats were treated with OMT or dexamethasone (DXM) intraperitoneally once a day for 43 days. Paw swelling, arthritic score and joint histopathology were evaluated. The Treg/Th17-mediated autoreactive response was assessed by determining serum levels of inflammatory response cytokines, including tumor necrosis factor (TNF)-α and interleukin (IL)-17, using an enzyme-linked immunosorbent assay. The mRNA levels of forkhead box P3 (FOXP3) and retinoic acid-related orphan receptor (ROR)γt in spleen cells stimulated with type II collagen were determined using reverse transcription-quantitative polymerase chain reaction analysis. In addition, the protein expression levels of FOXP3 and RORγt were measured using western blot analysis. The results showed that OMT treatment significantly reduced the severity of CIA, markedly abrogating paw swelling, arthritic scores and synovial hyperplasia, and the increased loss in body weight. OMT significantly reduced the production of TNF-α and IL-17A, upregulated FOXP3 and downregulated RORγt in rats with CIA. In conclusion, the present study demonstrated that OMT exhibited a protective effect on rheumatoid arthritis (RA) through the inhibition of inflammation and regulation of Treg/Th17 in the CIA rats, suggesting that OMT may be used as an immune suppressive and cartilage protective medicine in human RA.