To study the mechanism of osteophyte formation in the ankle joints of adjuvant arthritic (AA) rats, the localization of peripheral nerves and immune cells in the synovia were investigated in both axotomized AA rats, whose sciatic nerves were resected before adjuvant injection, and sham-operated ones, using immunohistochemistry for low-affinity nerve growth factor receptor (p75NGFR), growth-associated protein (GAP)-43, calcitonin gene-related peptide (CGRP), helper T cell (W3/25), monocyte/macrophage (ED1), and transforming growth factor (TGF)-β1 and its receptor, TGF-βRII. In sham-operated AA rats, dense plexuses of CGRP-positive fibers were observed in the inflamed synovia close to the osteophytes. Most of the CGRP-positive fibers were also positive for p75NGFR and GAP-43. These fibers appeared to be newly sprouted sensory nerves. In axotomized AA rats, the synovia were supplied with no CGRP-positive fibers and the sizes of the osteophytes were smaller than those in sham-operated animals. The ratio of the number of both W3/25-and ED1-positive cells in the inflamed synovia of sham-operated rats peaked at weeks 2-3 after adjuvant injection. The peak, however, lasted until week 4 in axotomized ones. In both animal groups, the macrophages and the osteoblasts were stained for TGF-β1. The osteoblasts covering the osteophytes were also stained for TGF-βRII. The present findings suggest that the sensory nerves and the macrophages may be involved in osteophyte formation in the ankle joints of AA rats. * Significant difference between the axotomized AA rats and sham-operated AA rats (P<0.001)