Osteoarthritis (OA) is a common degenerative condition that afflicts more than 70% of the population between 55 and 77 years of age. Although its prevalence is rising globally with aging of the population, current therapy is limited to symptomatic relief and, in severe cases, joint replacement surgery. We report that intra-articular expression of proteoglycan 4 (Prg4) in mice protects against development of OA. Long-term Prg4 expression under the type II collagen promoter (Col2a1) does not adversely affect skeletal development but protects from developing signs of age-related OA. The protective effect is also shown in a model of posttraumatic OA created by cruciate ligament transection. Moreover, intra-articular injection of helper-dependent adenoviral vector expressing Prg4 protected against the development of posttraumatic OA when administered either before or after injury. Gene expression profiling of mouse articular cartilage and in vitro cell studies show that Prg4 expression inhibits the transcriptional programs that promote cartilage catabolism and hypertrophy through the up-regulation of hypoxia-inducible factor 3α. Analyses of available human OA data sets are consistent with the predictions of this model. Hence, our data provide insight into the mechanisms for OA development and offer a potential chondroprotective approach to its treatment.