The variant rs26232, in the first intron of the chromosome 5 open reading frame 30 (C5orf30) locus, has recently been associated with both risk of developing rheumatoid arthritis (RA) and severity of tissue damage. The biological activities of human C5orf30 are unknown, and neither the gene nor protein show significant homology to any other characterized human sequences. The C5orf30 gene is present only in vertebrate genomes with a high degree of conservation, implying a central function in these organisms. Here, we report that C5orf30 is highly expressed in the synovium of RA patients compared with control synovial tissue, and that it is predominately expressed by synovial fibroblast (RASF) and macrophages in the lining and sublining layer of the tissue. These cells play a central role in the initiation and perpetuation of RA and are implicated in cartilage destruction. RASFs lacking C5orf30 exhibit increased cell migration and invasion in vitro, and gene profiling following C5orf30 inhibition confirmed up-regulation of genes involved in cell migration, adhesion, angiogenesis, and immune and inflammatory pathways. Importantly, loss of C5orf30 contributes to the pathology of inflammatory arthritis in vivo, because inhibition of C5orf30 in the collagen-induced arthritis model markedly accentuated joint inflammation and tissue damage. Our study reveal C5orf30 to be a previously unidentified negative regulator of tissue damage in RA, and this protein may act by modulating the autoaggressive phenotype that is characteristic of RASFs.