Osteoarthritis (OA), which is also called degenerative arthritis, is the leading cause of disabilities in the old people. The Chinese traditional herb Epimedium grandiflorum had long been found to attenuate osteoarthritis process, but the detailed mechanism was not clear. To study the mechanisms of E. grandiflorum in the treatment of osteoarthritis, rabbit osteoarthritis model combined with D-galactose was used. After different treatments for 10 weeks, cartilage sections were analyzed by immunohistochemistry for uPA, uPAR and PAI expression level. E. grandiflorum could significantly attenuate OA condition and decrease uPA, uPAR and PAI expression. The extract of E. grandiflorum, icariin also had a similar effect when compared with E. grandiflorum treatment alone. Rabbit chondrocytes were further isolated to be stimulated by TNFalpha combined with different reagents treatment. Here, icariin treatment significantly reduced nuclear factor kappa B NF-kappaB (P65) activity, decreased uPA expression level and increased Ikappabetaalpha protein level. The results indicated that E. grandiflorum and its extract icariin could attenuate OA condition, reduce the expression of uPA and uPAR and increase PAI in experimental rabbit model and this effect may be conducted by suppressing NF-kappaB activity by increasing IkappaBalpha level.