Despite the known benefits of physical activity (PA) adults with arthritis (AWA) are less active than adults without arthritis. A two-part study was undertaken to determine whether routine PA among U.S. AWA was associated with lower healthcare utilization or predicted lower medical expenditures. Subjects included AWA in the 2010 Medical Expenditure Panel Survey (MEPS) dataset (n=5,600).Part 1: MEPS data were analyzed to generate descriptive characteristics and explore differences in healthcare utilization by physical activity status. Measures of interest included the length of time elapsed since last check-up, whether appointments for care were made, number of visits for care, number of times tests, care or treatment were thought necessary, and number of times a specialist was needed. Descriptive statistics were calculated for inactive and active AWA. Chi-Square tests were used to identify differences in frequency of service utilization. Part 2: A retrospective case-control study was conducted to assess the impact of PA on medical expenditures. PA was the primary independent variable and total medical expenditures served as the dependent variable. Potential confounders such as age, race, gender, BMI, insurance, heart disease, high blood pressure, stroke, diabetes, and obesity were included in the model. Logistic regressions, via SAS 9.3, were used to predict savings in total healthcare expenditures based on PA status and compute odds ratios. Healthcare utilization differed between active and inactive AWA. Generally, active AWA utilized fewer services than inactive AWA. Active and inactive AWA differed significantly (Chi-square) in time since last checkup (p<.0001), needing a specialist (p<.0001), number of appointments for care (p=.0004), and number of healthcare visits (p<.0001), but not in need for test(s) or treatment (p=.4197). Active AWA also had significantly lower medical expenditures than inactive ones. Regressions showed PA predicted cost savings up to $3,000 among AWA even after adjusting for confounders (OR = 0.762, CI: 0.703, 0.825).These findings suggest there are simple ways to improve arthritis management and reduce healthcare expenditures through PA. Promoting arthritis-appropriate PA programs or systematizing incentives for participation in them may be a cost-effective strategy for improving quality of life and reducing health-related costs for adults with arthritis.