Lipocalin 2 (Lcn2), a 25KDa innate immune protein, known to be dramatically up regulated in various inflammatory disorders including antibody-mediated arthritis, yet its biological role remains unclear. More recently our studies have suggested that the regulation might be necessary for the initiation and further resolution of inflammatory process. However, the exact mechanism involved in this process is still unknown. In this study, we report that Lcn2 is up regulated up to 5 fold during the course of serum-induced arthritis (SIA) in wild type (WT) mice. Likewise, Lcn2KO mice suffered a severe arthritic disease with elevated systemic proinflammatory cytokines as compared to their WT littermates. Immunological analysis revealed a considerable increase in granulocytic population (Gr1+, CD11b+, CD11c+), and a significant decrease (4.2 fold) in regulatory T cell (CD4+, CD25+ and FoxP3+) population in Lcn2KO arthritic mice as compared to their WT littermates. Accordingly, Lcn2KO mice exhibited a defect in T cell proliferation as compared to their WT counterparts, suggesting a novel role for Lcn2 in splenocyte proliferation and T-reg expansion. Collectively, our data suggests a crucial role of Lcn2 in resolution of arthritic inflammation via T-reg expansion, making it a promising target in designing better therapeutic strategies for the treatment of rheumatoid arthritis.