Etanercept, a TNF receptor 2-Fc fusion protein, is currently being used for the treatment of rheumatoid arthritis (RA). However, 25% to 38% of patients show no response which is suspected to be partially due to insufficient affinity of this protein to TNFalpha. By using computational protein design, we found that residue W89 and E92 of TNFR2 were critical for ligand binding. Among several mutants tested, W89Y/E92N displayed 1.49-fold higher neutralizing activity to TNFalpha, as compared to that of Etanercept. Surface plasmon resonance (SPR) based binding assay revealed that the equilibrium dissociation constant of W89Y/E92N to TNFalpha was 3.65-fold higher than that of Etanercept. In a rat model of collagen-induced arthritis (CIA), W89Y/E92N showed a significantly better ability than Etanercept in reducing paw swelling and improvement of arthritic joint histopathologically. These data demonstrate that W89Y/E92N is potentially a better candidate with improved efficacy in treating RA and other autoimmune diseases.