Scope Quercetin (QU) is one of the most abundant flavonoids in plants and has attracted the attention of researchers because of its remarkable antirheumatoid arthritis (RA) effects and extremely low adverse reactions. However, the underlying mechanism needs further study. Methods and results Flow cytometry, immunofluorescence, enzyme linked immunosorbent assay （ELISA）, and quantitative real‐time polymerase chain reaction （qRT‐PCR） reveal the obvious inhibitory effects of QU on Th17 cell differentiation in arthritic mice. More importantly, QU markedly limits the development of Th17 cell polarization, which is virtually compromised by the treatment with peroxisome proliferator activated receptor γ (PPARγ) inhibitor GW9662 and knockdown of PPARγ. Additionally, molecular dynamics simulation and immunofluorescence exhibit QU directly binds to PPARγ and increases PPARγ nuclear translocation. Besides, QU confers its moderation effect on suppressor of cytokine signaling protein (SOCS3)/signal transducer and activator of transcription 3 (STAT3) axis partially depending on PPARγ. Furthermore, coimmunoprecipitation shows QU redistributes the corepressor silencing mediator for retinoid and thyroid‐hormone receptors (SMRT) from PPARγ to STAT3. Finally, the inhibition of Th17 response and the antiarthritic effect of QU are nullified by GW9662 treatment in arthritic mice. Conclusion QU targets PPARγ and consequently inhibits Th17 cell differentiation by dual inhibitory activity of STAT3 to exert antiarthritic effect. The findings facilitate its development and put forth a stage for uncovering the mechanism of other naturally occurring compounds with chemical structures similar to QU. Quercetin is commonly found in foods with anti‐arthritic effects. In this work, authors try to explore the underlying mechanism of quercetin on rheumatoid arthritis. The research finds that quercetin could up‐regulate the expression of suppressors of cytokine signaling 3 (SCOS3) by directly activating peroxisome proliferator activated receptor γ (PPARγ), and further impede Th17 cell differentiation to alleviate arthritis.