Aberrant number and/or dysfunction of CD4+Foxp3+ Regulatory T cells (Tregs) are associated with the pathogenesis of rheumatoid arthritis (RA). A previous study has demonstrated that thymus-derived, natural Tregs (nTregs) prefer to accumulate in inflamed joints and transdifferentiate to TH17 cells under the stimulation of inflamed synovial fibroblasts (SFs). In this study, we made a head-to-head comparison of both Treg subsets and demonstrated that induced Tregs (iTregs), but not nTregs, retained Foxp3 expression and regulatory function on T effector cells (Teffs) after being primed with inflamed SFs. In addition, iTregs inhibited proliferation, inflammatory cytokine production, migration, and invasion ability of collagen-induced arthritis (CIA)–SFs in vitro and in vivo. Moreover, we noted that iTregs directly targeted inflamed SFs to treat autoimmune arthritis, while nTregs failed to do this. Thus, manipulation of the iTreg subset may have a greater potential for prevention or treatment of patients with RA.