This invention provides a method of treating a subject afflicted with rheumatoid arthritis comprising periodically administering to the subject an amount of laquinimod or pharmaceutically acceptable salt thereof and an amount of methotrexate, wherein the amounts when taken together are effective to treat the subject. This invention also provides laquinimod or pharmaceutically acceptable salt thereof for use in combination with methotrexate in treating a subject afflicted with rheumatoid arthritis. This invention also provides a pharmaceutical composition comprising an amount of laquinimod or pharmaceutically acceptable salt thereof and an amount of methotrexate for use in treating a subject afflicted with rheumatoid arthritis.