Rhododendron molle G. Don is first recorded in Shengnong's Herbal Classic, and its fruits, which are termed as Liuzhouzi, are often used to treat rheumatoid arthritis in Chinese folk. During our ongoing investigation to develop a safer and potential new arthritis therapy, a process for the preparation of diterpenoid fraction from Rhododendron mollefruits was established. In order to evaluate the main components and the anti-rheumatoid arthritis effect of the diterpenoid fraction, phytochemical and pharmacological experiments were used. As the result, the main components of diterpenoid fraction were identified as rhodojaponin III (1), rhodojaponin VI (2), 2-O-methylrhodojaponin (3), and 5'-β-D-glucopyranosy-loxyjasmonic acid (4). These four components constitute greater than 95% of diterpenoid fraction using area normalization method of HPLC-ELSD. The results of CIA rat experiment showed that high dose of diterpenoid fraction (0.6 mg·kg·d) significantly alleviated the symptoms of rheumatoid arthritis, similar to tripterygium polyglycosides, an effective RA therapy. Preliminary mechanism studies indicated that diterpenoid fraction significantly inhibited the abnormal proliferation of T and B lymphocytes, and remarkably reduced the levels of pro-inflammatory cytokines IL-6, IL-1β and TNF-α. Overall, our findings may provide a more effective and safe alternative treatment for RA using common clinical Chinese medicines like tripterygium polyglycosides.