Rheumatoid arthritis is characterized by focal loss of cartilage due to an up-regulation of inflammatory pathways, which produce pro-inflammatory mediators, such as interleukin-1(IL-1), tumour necrosis factor alpha($TNF-alpha$), prostaglantin, and nitric oxide(NO). We investigated the anti-arthritic effects of water extracts from Pellodendri cortex and Atractylodis rhizoma in vitro and in vivo. Each extract suppressed the production of inflammatory mediators(NO, $IL-1eta$, $TNF-alpha$, and prostaglandin $E_2$) and the expression of inducible NO synthase and cyclooxygenase-2 in lipopolysaccharide-stimulated macrophages in a dose-dependent manner. These suppressive effects were synergistically increased by their combination. The same results were also observed in the rat osteoblast sarcoma cell line ROS17/2.8 stimulated with $IL-1eta$, $IFN-gamma,$ and $TNF-alpha$. Moreover, the combination of these water extracts significantly suppressed collagen-induced mouse arthritis. These results suggest that the combination of water-extractable components of Pellodendri cortex and Atractylodis rhizoma may be useful for therapeutic drugs against rheumatoid arthritis, probably by suppressing the production of inflammatory mediators.