Stem cell therapy stands out as a promising avenue for addressing arthritis treatment. However, its therapeutic efficacy requires further enhancement. In this study, we investigated the anti-arthritogenic potential of human amniotic mesenchymal stem cells (AMM) overexpressing insulin-like growth factor 1 (IGF-1) in a collagen-induced mouse model. The gene was introduced into the genome of AMM through transcription activator-like effector nucleases (TALENs). We assessed the in vitro immunomodulatory properties and in vivo anti-arthritogenic effects of IGF-1-overexpressing AMM (AMM/I). Co-culture of AMM/I with interleukin (IL)-1β-treated synovial fibroblasts significantly suppressed NF-kB levels. Transplantation of AMM/I into mice with collagen-induced arthritis (CIA) led to significant attenuation of CIA progression. Furthermore, AMM/I administration resulted in the expansion of regulatory T-cell populations and suppression of T-helper-17 cell activation in CIA mice. In addition, AMM/I transplantation led to an increase in proteoglycan expression within cartilage and reduced infiltration by inflammatory cells and also levels of pro-inflammatory factors including cyclooxygenase-2 (COX-2), IL-1β, NF-kB, and tumor necrosis factor (TNF)-α. In conclusion, our findings suggest that gene-edited human AMM represent a novel alternative therapeutic strategy for the treatment of arthritis.