Tumor necrosis factor (TNF) is key to the pathogenesis of various arthritic diseases and inflammatory bowel disease (IBD). Anti-TNF therapies have proved successful in the clinical treatment of these diseases, but a mechanistic understanding of TNF function is still lacking. We have investigated early cellular mechanisms of TNF function in these diseases using an established TNF transgenic model, which develops a spondyloarthritis-like disease characterized by peripheral joint arthritis, sacroiliitis, enthesitis, and Crohn's-like IBD. Bone marrow grafting experiments demonstrated that development of arthritis requires TNF receptor I (TNFRI) expression in the radiation-resistant compartment, which is also known to be a sufficient target of TNF in the development of Crohn's-like IBD in the same model. Early activation of synovial fibroblasts and intestinal myofibroblasts could also be demonstrated by perturbed expression of matrix metalloproteases and their inhibitors. Notably, selective Cre/loxP-mediated TNFRI expression in mesenchymal cells resulted in a fully arthritic–spondyloarthritic and intestinal phenotype, indicating that mesenchymal cells are primary and sufficient targets of TNF in these pathologies. Our results offer a novel mechanistic perspective for TNF function in gut and joint pathologies and indicate early common cellular pathways that may also explain the often observed synovial–gut axis in human disease.