Rheumatoid arthritis (RA) is characterized by synovial joint inflammation, cartilage damage and dysregulation of the adaptive immune system. While neutrophil extracellular traps (NETs) have been proposed to play a role in the generation of modified autoantigens and in the activation of synovial fibroblasts, it remains unknown whether NETs are directly involved in cartilage damage. Here, we report a new mechanism by which NET-derived elastase disrupts cartilage matrix and induces release membrane-bound peptidylarginine deiminase-2 (PAD2) by fibroblast-like synoviocytes (FLS). Cartilage fragments are subsequently citrullinated, internalized by FLS, and then presented to antigen-specific CD4+ T cells. Furthermore, immune-complexes containing citrullinated cartilage components can activate macrophages to release pro-inflammatory cytokines. HLA-DRB1*04:01 transgenic mice immunized with NETs develop autoantibodies to citrullinated cartilage proteins and display enhanced cartilage damage. Inhibition of NET-elastase rescues NET-mediated cartilage damage. These results show that NETs and neutrophil elastase externalized in these structures play fundamental pathogenic roles in promoting cartilage damage and synovial inflammation. Strategies targeting neutrophil elastase and NETs could have a therapeutic role in RA and in other inflammatory diseases associated with inflammatory joint damage.