Osteoarthritis (OA) is a degenerative joint disease characterised by cartilage degeneration and chondrocyte inflammation. We investigated the anti-inflammatory effects of the Siraitia grosvenorii residual extract (SGRE) in lipopolysaccharide (LPS)-induced RAW264.7 macrophages in vitro and its anti-osteoarthritic effects in a monosodium iodoacetate (MIA)-induced OA rat model. SGRE dose-dependently decreased nitric oxide (NO) production in LPS-induced RAW264.7 cells. Moreover, SGRE reduced the pro-inflammatory mediator (cyclooxygenase-2 (COX2), inducible NO synthase (iNOS), and prostaglandin E2 (PGE2)) and pro-inflammatory cytokine (interleukin-(IL)-1β, IL-6, and tumour necrosis factor (TNF-α)) levels. SGRE suppressed nuclear factor kappa B (NF-κB) and mitogen-activated protein kinase (MAPK) pathway activation in RAW264.7 macrophages, thus reducing inflammation. Rats were orally administered SGRE (150 or 200 mg/kg) or the positive control drug JOINS (20 mg/kg) 3 days before MIA injection, and once daily for 21 days thereafter. SGRE elevated the hind paw weight-bearing distribution, thus relieving pain. It also reduced inflammation by inhibiting inflammatory mediator (iNOS, COX-2, 5-LOX, PGE2, and LTB4) and cytokine (IL-1β, IL-6, and TNF-α) expression, downregulating cartilage-degrading enzymes, such as MMP-1, -2, -9, and -13. SGRE significantly reduced the SOX9 and extracellular matrix component (ACAN and COL2A1) levels. Therefore, SGRE is a potential therapeutic active agent against inflammation and OA.