Osteoarthritis (OA) is a common degenerative joint disease featuring the degeneration, destruction, and ossification of cartilage. Inflammation which may facilitate OA occurrence and development is considered as the main pathological factor. Betulin, a natural product extracted from birch bark, has been commonly used for inflammation treatment; however, its role in OA remains unclear. This study is aimed to explore whether betulin can suppress IL-1β–induced inflammation in chondrocytes and alleviate OA in vitro and in vivo. In in vitro studies, the generation of pro-inflammatory factors, such as interleukin-6 (IL-6), tumor necrosis factor alpha (TNF-α), prostaglandin E2 (PGE2), and nitric oxide (NO), was assessed using the enzyme-linked immunosorbent assay (ELISA) and Griess reaction. As revealed by results, betulin inhibited the expression of pro-inflammatory mediators. In addition, the protein expressions of inducible nitric oxide synthase (iNOS), cyclooxygenase-2 (COX-2), matrix metalloproteinase (MMP-13), thrombospondin motifs 5 (ADAMTS5), Collagen II, and Aggrecan were quantified using Western blot analysis. We found that betulin could inhibit the generation of COX-2 and iNOS induced by IL-1β, indicating that betulin has anti-inflammatory effects in chondrocytes. Furthermore, betulin downregulates the expression of MMP-13 and ADAMTS-5 and upregulates the expression of Collagen II and Aggrecan, indicating that it can inhibit the degradation of the extracellular matrix. In mechanism, betulin activated the AKT/Nrf2 pathway and inhibited the phosphorylation of p65. In in vivo studies, administration of betulin in vivo could inhibit cartilage destruction and inflammatory progression. Therefore, these findings suggest that betulin may alleviate IL-1β–induced OA via the AKT/Nrf2/HO-1/NF-κB signal axis, and betulin may be a potential drug for the treatment of OA.