Previous studies have suggested that the morphology and function of the thalamus and cortex are abnormal in patients with knee osteoarthritis (KOA). However, whether the thalamocortical network is differentially affected in this disorder is unknown. In this study, we examined functional and effective connectivity between the thalamus and major divisions of the cortex in 27 healthy controls and 27 KOA patients using functional magnetic resonance imaging. We also explored the topological features of the brain via graph theory analysis. The results suggested that patients with KOA had significantly reduced resting‐state functional connectivity (rsFC) of the thalamo–sensorimotor pathway; enhanced rsFC of the thalamo–medial/lateral frontal cortex (mFC/LFC), parietal, temporal and occipital pathways; reduced effective connectivity of the left sensorimotor‐to‐thalamus pathway; and enhanced effective connectivity of the right thalamus‐to‐sensorimotor pathway compared with healthy controls. The functional connectivity of the thalamo–sensorimotor and thalamo–mFC pathways was enhanced when patients performed the multisource interference task. Moreover, patients with KOA presented altered nodal properties associated with thalamocortical circuits, including the thalamus, amygdala, and regions in default mode networks, compared with healthy controls. The correlation analysis suggested a significant negative correlation between thalamo–mFC rsFC and pain intensity, between thalamo–sensorimotor task‐related connectivity and disease duration/depression scores, and a positive correlation between right frontal nodal properties and pain intensity in KOA patients. Taken together, these findings establish abnormal and differential alterations in the thalamocortical network associated with pain characteristics in KOA patients, which extends our understanding of their role in the pathophysiology of KOA.