TGF-β signaling is crucial for modulating osteoarthritis (OA), and protein phosphatase magnesium–dependent 1A (PPM1A) has been reported as a phosphatase of SMAD2 and regulates TGF-β signaling, while the role of PPM1A in cartilage homeostasis and OA development remains largely unexplored. In this study, we found increased PPM1A expression in OA chondrocytes and confirmed the interaction between PPM1A and phospho-SMAD2 (p-SMAD2). Importantly, our data show that PPM1A KO substantially protected mice treated with destabilization of medial meniscus (DMM) surgery against cartilage degeneration and subchondral sclerosis. Additionally, PPM1A ablation reduced the cartilage catabolism and cell apoptosis after the DMM operation. Moreover, p-SMAD2 expression in chondrocytes from KO mice was higher than that in WT controls with DMM induction. However, intraarticular injection with SD-208, repressing TGF-β/SMAD2 signaling, dramatically abolished protective phenotypes in PPM1A-KO mice. Finally, a specific pharmacologic PPM1A inhibitor, Sanguinarine chloride (SC) or BC-21, was able to ameliorate OA severity in C57BL/6J mice. In summary, our study identified PPM1A as a pivotal regulator of cartilage homeostasis and demonstrated that PPM1A inhibition attenuates OA progression via regulating TGF-β/SMAD2 signaling in chondrocytes and provided PPM1A as a potential target for OA treatment.