Osteoarthritis (OA) is a degenerative joint disease mainly characterized by cartilage degradation. Interleukin-1β (IL-1β) contributes to OA pathogenesis by enhancing oxidative stress and inflammation. Melatonin reportedly elicits potent protection against OA. However, the role of melatonin and underlying mechanism in IL-1β-stimulated chondrocytes remain largely unclear. In this study, we found that melatonin inhibited IL-1β-induced toxicity and sirtuin 1 (Sirt1) enhancement in human chondrocytes. Melatonin reduced the IL-1β-increased nicotinamide phosphoribosyltransferase (NAMPT) expression and the NAD+ level in chondrocytes in a Sirt1-dependent manner. In turn, the inhibitory effect of melatonin on Sirt1 was mediated by NAMPT. Moreover, melatonin suppressed IL-1β-induced Sirt1-mediated matrix metalloproteinase (MMP)-3 and MMP-13 production. Melatonin also decreased the Sirt1-steered nuclear factor of activated T cells 5 (NFAT5) expression in IL-1β-challenged chondrocytes. NFAT5 depletion mimicked the suppressive effects of melatonin on IL-1β-elevated production of inflammatory mediators, including tumor necrosis factor-α (TNF-α), IL-1β, prostaglandin E2 (PGE2), and nitric oxide (NO) in chondrocytes. TNF-α, IL-1β, PGE2, or NO decrease caused the similar reduction of MMP-3 and MMP-13 by melatonin in IL-1β-insulted chondrocytes. Highly consistent with in vitro findings, in vivo results demonstrated that melatonin repressed the expression of relevant genes in rat OA pathogenesis in anterior cruciate ligament transection model. Overall, these results indicate that melatonin effectively reduced IL-1β-induced MMP production by inhibiting Sirt1-dependent NAMPT and NFAT5 signaling in chondrocytes, suggesting melatonin as a potential therapeutic alternative for chondroprotection of OA patients.