Rheumatoid arthritis (RA) is a chronic and autoimmune-mediated inflammatory disease. We aimed to investigate the regulation of lncRNA HOTAIR in LPS-treated chondrocytes and RA mouse. Our results showed that HOTAIR expression was significantly reduced in LPS-treated chondrocytes. The HOTAIR was then over-expressed in chondrocytes by transfecting recombinant lentivirus carrying sequences encoding HOTAIR. The LPS-induced reduction of cell proliferation rate and production of two inflammatory factors interleukin (IL)-17, IL-23 were markedly inhibited. Enforced expression of HOTAIR also led to the upregulation of proliferation-related protein Ki67 and proliferating cell nuclear antigen (PCNA). Moreover, a negative correlation was detected between the expression of HOTAIR and microRNA (miR)-138, and the expression of miR-138 was significantly increased in LPS-induced chondrocytes. The effects of HOTAIR over-expression on the proliferation and inflammation were partly reversed by miR-138 overexpression. Furthermore, the overexpression of HOTAIR significantly inhibited the activation of nuclear transcription factor-κB (NF-κB) in LPS-treated chondrocytes by suppressing p65 to cell nucleus, resulting in the down-regulation of IL-1β and tumor necrosis factor (TNF)-α. In addition, the in vivo experiments exhibited that overexpression of HOTAIR increased cell proliferation and inhibited inflammation in RA rats, which were demonstrated by upregulation of Ki67 and PCNA, reduced CD4+IL-17+,CD4+IL-23+ cells, and down-regulation of p-p65, IL-1β and TNF-α. In summary, our study suggests HOTAIR plays a protective role in RA by increasing proliferation rate and inhibiting inflammation, which may be related with the regulation of miR-138 expression and NF-κB signaling pathway. These results suggest that the regulation of HOTAIR may be a promising therapeutic strategy for RA.