Human small extracellular vesicles (sEVs) derived from adipose-derived mesenchymal stromal cells (ASC) have been reported to suppress the progression of osteoarthritis (OA) in animal studies and subsequently, translation of this potential to assess their clinical efficacy is anticipated. However, fabrication protocols for sEVs to eliminate potential contamination by culture medium-derived components need to be established prior to their clinical use. The purpose of the present studies was to elucidate the influence of medium-derived contaminants on the biological effects of sEVs, and to establish isolation methods for sEVs using a new clinical grade chemically-defined media (CDM). The quantity and purity of ASC-derived sEVs cultured in four different CDMs (CDM1, 2, 3 and 4) were evaluated. The concentrates of the four media incubated without cells were used as the background (BG) control for each set of sEVs. The biological effect of sEVs fabricated in the four different CDMs on normal human articular chondrocytes (hACs) were evaluated in vitro using a variety of methodological assessments. Finally, the sEVs with the highest purity were tested for their ability to suppress the progression of knee OA mouse model. Analysis of the BG controls revealed that CDM1-3 contained detectable particles, while there was no visible contamination of culture media-derived components detected with CDM4. Accordingly, the sEVs fabricated with CDM4 (CDM4-sEVs) exhibited the highest purity and yield. Notably, the CDM4-sEVs were the most efficient in promoting the cellular proliferation, migration, chondrogenic differentiation, and anti-apoptotic activity of hACs. Furthermore, CDM4-sEVs significantly suppressed the osteochondral degeneration in vivo model. Small EVs derived from ASCs cultured in a CDM without detectable contaminants demonstrated enhanced biological effects on hACs and the progression of OA. Thus, sEVs isolated with CDM4 most optimally meet the requirements of efficacy and safety for assessment in their future clinical applications.