Rheumatoid arthritis is a destructive arthropathy characterized by chronic synovial inflammation that imposes a substantial socioeconomic burden. Under the influence of the proinflammatory milieu, synovial fibroblasts (SFs), the main effector cells in disease pathogenesis, become activated and hyperplastic, releasing proinflammatory factors and tissue-remodeling enzymes. This study shows that activated arthritic SFs from human patients and animal models express significant quantities of autotaxin (ATX; ENPP2), a lysophospholipase D that catalyzes the conversion of lysophosphatidylcholine to lysophosphatidic acid (LPA). ATX expression from SFs was induced by TNF, and LPA induced SF activation and effector functions in synergy with TNF. Conditional genetic ablation of ATX in mesenchymal cells, including SFs, resulted in disease attenuation in animal models of arthritis, establishing the ATX/LPA axis as a novel player in chronic inflammation and the pathogenesis of arthritis and a promising therapeutic target.