Anti-tumor necrosis factor (TNF) drugs such as etanercept (ETN) have been mostly used in systemic treatment of rheumatoid arthritis. To eliminate the side effects in long-term treatments and to achieve a local sustained anti-inflammatory effect, a controlled drug delivery system is needed for anti-TNF drugs. This study aims to develop novel injectable microcarriers of ETN that can provide long-term controlled release of this protein drug upon intra-articular application. In this study, poly(epsilon-caprolactone) (PCL) and its copolymer with poly(ethylene glycol), methoxypoly(ethylene glycol)-poly(epsilon-caprolactone)-methoxypoly(ethylene glycol) microspheres (MPEG-PCL-MPEG) were compared for their prospective success in rheumatoid arthritis treatment. Microspheres with smooth surface of a mean particle diameter of approximately 5m were prepared with both polymers. MPEG-PCL-MPEG microspheres had higher encapsulation efficiency than PCL microspheres. The activity of encapsulated ETN within MPEG-PCL-MPEG microspheres also retained while 90% of the activity of ETN within PCL microspheres could retain during 90-day release. MPEG-PCL-MPEG microspheres showed faster ETN release compared to PCL microspheres in various release media. Cumulative amounts of ETN released from both types of microspheres were significantly lower in cell culture medium and in synovial fluids than in phosphate buffered saline. This was mainly due to protein adsorption onto microspheres. Hydrophilic MPEG segment enhanced ETN release while preventing protein adsorption on microspheres compared to PCL. Sustained ETN release from microspheres resulted with a significant decrease in pro-inflammatory cytokines (TNF, IFN, IL-6, IL-17) and MMP levels (MMP-3, MMP-13), while conserving viability of fibroblast-like synoviocytes compared to the free drug. Results suggest that MPEG-PCL-MPEG is a potential copolymer of PCL that can be used in development of biomedical materials for effective local treatment purposes in chronic inflammatory arthritis owing to enhanced hydrophilicity. Yet, PCL microspheres are also promising systems having good compatibility to synoviocytes and would be especially the choice for treatment approach requiring longer term and slower release.