The present study was conducted to evaluate the anti-inflammatory and anti-arthritic effects of fermented Achyranthes japonica (Miq.) Nakai extract (FAJE). The FAJE was effective in nitrogen oxide (NO) scavenging in RAW264.7 cells. In the case of experimental Sprague Dawley (SD) rats injected with monosodium iodoacetate (MIA), the levels of TNF-α and IL-1β in blood increased in the osteoarthritis-induced group while decreasing in the group administered with FAJE. In addition, MMP-2 and MMP-9 in cartilage tissues increased in the osteoarthritis-induced group, but decreased in the group treated with FAJE. Cartilage examination indicated that the osteoarthritis-induced group exhibited cartilage erosion and cell degeneration, but in the FAJE administered group the tissue, conditions were recovered and cartilage proteoglycan was increased. Therefore, FAJE clearly showed anti-inflammatory effects and this suggests it is effective for recovery from osteoarthritis induced by MIA.