Objective. To explore the effect of moxibustion instrument combined with ultrashort wave on pain and oxidative stress in elderly patients with knee osteoarthritis (KOA). Method. 84 elderly patients with knee osteoarthritis treated in our hospital from May 2020 to June 2021 were randomly divided into observation group ( n = 42 ) and control group ( n = 42 ). The observation group was treated with moxibustion instrument combined with ultrashort wave, while the control group was treated with moxibustion instrument. The clinical efficacy of the two groups was compared, and the pain of the two groups was evaluated by visual analogue scale (VAS). Lysholm knee joint score scale and osteoarthritis index (WOMAC) scale of Western Ontario and McMaster University were used to evaluate the knee joint function of the two groups, and the levels of interleukin-1β (IL-1β), tumor necrosis factor α (TNF-α), serum superoxide dismutase (SOD), serum malondialdehyde (MDA), serum miR-155, and NLRP3 were detected in the two groups, and the comprehensive quality of life assessment questionnaire-74 was used, and the adverse reactions were compared between the two groups. Results. The total effective rate of observation group (90.48%) was higher than that of control group (69.05%) ( P < 0.05 ). After treatment, VAS, Lysholm knee joint, WOMAC, quality of life scores, IL-1β, TNF-α, SOD, MDA, miR-155, and NLRP3 in the observation group were better than those in the control group, and the differences were statistically significant ( P < 0.05 ). There were no obvious adverse reactions in both groups. Conclusion. Moxibustion instrument combined with ultrashort wave can effectively improve knee joint pain, knee joint function, inflammatory reaction, oxidative stress reaction, and quality of life in elderly KOA patients, and the therapeutic effect is good.