Interleukin 17 (IL-17) and hypoxia have been implicated to play a key role in rheumatoid arthritis (RA). In this study, the combined treatment of IL-17 and cobalt chloride (CoCl2), a hypoxia mimetic significantly increased the osteoclast formation and the expression of TRAP and MMP-9 in RAW 264.7 macrophage cells in the presence of RANKL and M-CSF. The unified effect of IL-17 and CoCl2 markedly increased osteoclast mediated bone erosion through the activation of RANKL/NF-κB/NFATc1 signaling pathway. The treatment of IL-17 in combination with CoCl2 further potentiated the protein and mRNA expression of HIF-1α and MMP-9 in rat synovial macrophages. Conversely, the blockage of HIF-1α expression with BAY87-2243 abrogated the IL-17 and CoCl2 mediated expression of HIF-1α and MMP-9. Further, the knockdown of IL-17RA using siRNA reversed the IL-17 and CoCl2 induced expression of HIF-1α in synovial macrophages. In conclusion, IL-17 synergizes with CoCl2 induced hypoxic condition to augment osteoclast mediated bone erosion and synovial macrophages mediated RA pathogenesis.