Background: Natural small molecules have become more attractive as alternatives to non-steroidal anti-inflammatory drugs in osteoarthritis (OA) treatments. This study aims to investigate the effects of Asiatic acid (AA) on OA in chondrocytes and the surgery-induced OA animal model. Methods: Cytotoxicity of AA in primary rat articular chondrocytes was determined. Chondrocytes were pretreated with AA at the safe concentrations and subsequently treated with IL-1β. The production of inflammatory mediators including nitric oxide (NO), nitric oxide synthase (iNOS), as well as cyclooxygenase (COX)-2, and the expression of chondrogenic and hypertrophic markers including Sox 9, Aggrecan, Col 2a1, and matrix metalloproteinase-13 (MMP13) in the cells were measured. The effect of AA on nuclear factor-kappa B (NF-κB) signaling pathway was further determined by dual luciferase assay and western blot. The surgery-induced OA animals were treated with AA or saline for 6 weeks. The pathological changes in the affected joints were measured by micro-CT and histological analysis. Results: We found a broad safety spectrum of AA from 0 to 25 μM. A dose-dependent inhibitory effect of AA on NO production, as well as iNOS and COX-2 expression were found. Meanwhile, AA promoted chondrogenesis and inhibited hypertrophy in chondrocyte treated with IL-1β. In addition, AA inhibited NF-κB signaling pathway with a dose-dependent manner. Furthermore, results from animal study revealed that AA prevented articular cartilage damage as well as subchondral bone remodeling in the surgery-induced OA animal.