Even though the regenerative potential of mesenchymal stem cells (MSCs) has been extensively studied, there is a debate regarding their minimal therapeutic properties. Bone morphogenetic proteins (BMP) are involved in cartilage metabolism, chondrogenesis, and bone healing. In this study, we aimed to analyze the role of genome-edited BMP-2 overexpressing amniotic mesenchymal stem cells (AMMs) in a mouse model of collagen-induced arthritis (CIA). The BMP-2 gene was synthesized and inserted into AMMs using transcription activator-like effector nucleases (TALENs), and BMP-2-overexpressing AMMs (AMM/B) were sorted and characterized using quantitative reverse transcription polymerase chain reaction (qRT-PCR). The co-culture of AMM/B with tumor necrosis factor (TNF)-α-treated synovial fibroblasts significantly decreased the levels of interleukin (IL)-34. The therapeutic properties of AMM/B were evaluated using the CIA mouse model. The injection of AMM/B attenuated CIA progression and inhibited T helper (Th)17 cell activation in CIA mice. In addition, the AMM/B injection increased proteoglycan expression in cartilage and decreased the infiltration of inflammatory cells and factors, including IL-1β, TNF-α, cyclooxygenase (COX)-2, and Nuclear factor kappa B (NF-kB) in the joint tissues. Therefore, editing the BMP-2 genome in MSCs might be an alternative strategy to enhance their therapeutic potential for treating cartilage degeneration in arthritic joints.