Rheumatoid arthritis (RA) is a multifactorial autoimmune disease, characterized by inflammation of synovial joints. Carnosic acid (CA) is a phenolic diterpene isolated from Rosmarinus officinailis, playing a central role in cytoprotective responses to oxidative stress and inflammation response. Our study aimed to investigate the effects of CA on RA progression in diabetic animals. Carnosic acid (CA) was used to treat collagen-induced arthritis (CIA)-induced db/db mice. Blood glucose, oral glucose tolerance test (OGTT) and insulin tolerance test (ITT) were investigated to explore insulin resistance. CA significantly down-regulated fasting blood glucose, glucose level in OGTT and ITT, ameliorated CIA-induced bone loss, and reduced pro-inflammatory cytokines and reactive oxygen species (ROS) in db/db mice with arthritis induced by CIA. In vitro, CA suppressed Receptor Activator for Nuclear Factor-κ B Ligand (RANKL)- and Macrophage colony-stimulating factor (M-CSF)-induced osteoclastogenesis. The osteoclastic specific markers were inhibited by CA. Signal transduction studies showed that CA significantly decreased the expression of molecules contributing to ROS and increased anti-oxidants. Additionally, CA inactivated the RANKL- and M-CSF-induced p38 mitogen activated protein kinases (MAPK), inhibited NF-κB phosphorylation, causing pro-inflammatory cytokines down-regulation. Together, CA ameliorated osteoclast formation and CIA-induced bone loss in db/db mice through inflammation suppression by regulating ROS-dependent p38 pathway.