Objective Human amnion mesenchymal cells (hAMCs), isolated from the amniotic membrane of human placenta, are a unique population of mesenchymal stem cells (MSCs). Recent studies indicated that hAMCs had immunosuppressive functions and might be used in treatment of some autoimmune diseases. The aim of this study is to explore the feasibility of using hAMCs for treatment rats with collagen-induced arthritis (CIA), a classic animal model for human rheumatoid arthritis. Methods SD rats were immunised with type II collagen and Freund's incomplete adjuvant. hAMCs were injected intraperitoneal when arthritis had become established. The arthritis was evaluated macroscopically and microscopically. Serum levels of IFN-gamma, TNF-alpha, SOD, MDA, GSH-Px and T-AOC were detected by commercially assay kits. CD4(+)/CD8(+) T-cell ratio in peripheral blood was examined by flow cytometry. Proliferation of splenocytes was evaluated using MTT assay. Results The results demonstrated that application of hAMCs significantly ameliorated severity of arthritis and decreased the histopathological changes in CIA rats. Consistently, production of proinflammatory cytokines such as IFN-gamma and TNF-alpha was dramatically inhibited. Moreover, hAMCs exerted anti-oxidative capacity by significantly raising the levels of SOD, GSH-Px, T-AOC and lowering the level of MDA. In addition, hAMCs also remarkably restored CD4(+)/CD8(+) T-cell ratio and induced hyporesponsiveness of T lymphocytes by inhibiting their active proliferation. Finally, hAMCs had no obvious side effect on CIA rats. Conclusion In conclusion, our results indicated that hAMCs could attenuate the disease development in rats with CIA, which might be a promising cell source for therapy of rheumatoid arthritis.