Knee osteoarthritis (KOA) is a major cause of leg disability in the elderly population. Recently, the expression levels of circulating microRNA (miRNA) let-7e have been reported to be significantly reduced in KOA. The aims of the present study were to assess the feasibility of let-7e as a serum marker for detecting KOA and to explore the underlying mechanisms of its involvement. Based on previous studies and bioinformatics analysis, let-7e may regulate apoptosis and autophagy of articular chondrocytes. A total of 10 patients with KOA and 10 patients with trauma without KOA were recruited to examine the levels of let-7e in peripheral blood. Subsequently, KOA rat models were established, and the levels of let-7e in the cartilage and serum were examined, the expression of apoptotic proteins and autophagy-related proteins in the cartilage were investigated, and apoptotic and autophagic activities of primary cultured chondrocytes were also detected. In patients with KOA, let-7e levels in the peripheral serum were significantly decreased compared with the control group, and this result was confirmed in the peripheral serum and cartilage of KOA rats. In addition, the expression levels of proteins involved in the apoptotic pathway were increased in the cartilage of KOA rats, and apoptotic activity was increased. The expression of autophagy-related proteins beclin 1 and microtubule associated protein 1 light chain 3 β (Lc3B) II/Lc3BI in the articular cartilage of KOA rats was lower compared with the controls, and autophagy was decreased. Si-Miao-San (SMS) treatment restored the expression of let-7e and reversed the changes in apoptosis and autophagy. Therefore, the present study provided additional evidence that circulating let-7e may be a potential serum biomarker for the diagnosis and treatment of KOA. Elevated apoptosis levels and decreased autophagy levels of cartilage tissue are involved in KOA, and treatment with SMS may reverse these effects.