Osteoarthritis (OA) is a common articular degenerative disease characterized by loss of cartilage matrix and subchondral bone sclerosis. Kartogenin (KGN) has been reported to improve chondrogenic differentiation of mesenchymal stem cells. However, the therapeutic effect of KGN on OA-induced cartilage degeneration was still unclear. This study aimed to explore the protective effects and underlying mechanisms of KGN on articular cartilage degradation using mice with post-traumatic OA. To mimic the in vivo arthritic environment, in vitro cultured chondrocytes were exposed to interleukin-1β (IL-1β). We found that KGN barely affected the cell proliferation of chondrocytes; however, KGN significantly enhanced the synthesis of cartilage matrix components such as type II collagen and aggrecan in a dose-dependent manner. Meanwhile, KGN markedly suppressed the expression of matrix degradation enzymes such as MMP13 and ADAMTS5. In vivo experiments showed that intra-articular administration of KGN ameliorated cartilage degeneration and inhibited subchondral bone sclerosis in an experimental OA mouse model. Molecular biology experiments revealed that KGN modulated intracellular reactive oxygen species in IL-1β-stimulated chondrocytes by up-regulating nuclear factor erythroid 2-related factor 2 (NRF2), while barely affecting its mRNA expression. Microarray analysis further revealed that IL-1β significantly up-regulated miR-146a that played a critical role in regulating the protein levels of NRF2. KGN treatment showed a strong inhibitory effect on the expression of miR-146a in IL-1β-stimulated chondrocytes. Over-expression of miR-146a abolished the anti-arthritic effects of KGN not only by down-regulating the protein levels of NRF2 but also by up-regulating the expression of matrix degradation enzymes. Our findings demonstrate, for the first time, that KGN exerts anti-arthritic effects via activation of the miR-146a-NRF2 axis and KGN is a promising heterocyclic molecule to prevent OA-induced cartilage degeneration.