Osteoarthritis (OA) is a common chronic degenerative arthritis. Its treatment options are very limited. At present, hypoxia is a prominent factor in OA. This study aimed to re-explore the mechanism between hypoxia and OA, which provides new insights into the diagnosis and therapy of OA. We acquired the OA-related expression profiles of GSE48556, GSE55235, and GSE55457 for our analysis. Using gene set variation analysis (GSVA), we found significant differences in hypoxia. These differences result from multiple pathways, such as the p53 signaling pathway, cell senescence, the NF-kappa B signaling pathway, Ubiquitin-mediated proteolysis, and apoptosis. Meanwhile, the single-sample gene set enrichment analysis (ssGSEA) showed that hypoxia was significantly associated with the level of immune cell infiltration in the immune microenvironment. Thus, we believe that hypoxia is useful for the diagnosis and treatment of OA. We successfully constructed a novel hypoxia-related index (HRI) based on seven hypoxia-related genes (ADM, CDKN3, ENO1, NDRG1, PGAM1, SLC2A1, VEGFA) by least absolute shrinkage and binary logistic regression of the generalized linear regression. HRI showed potential for improving OA diagnosis through receiver operation characteristic (ROC) analysis (AUC training cohort = 0.919, AUC testing cohort = 0.985). Moreover, we found that celastrol, droxinostat, torin-2, and narciclasine may be potential therapeutic compounds for OA based on the Connectivity Map (CMap). In conclusion, hypoxia is involved in the development and progression of OA. HRI can improve diagnosis and show great potential in clinical application. Celastrol, droxinostat, torin-2, and narciclasine may be potential compounds for the treatment of OA patients.