Background: Posttraumatic osteoarthritis (OA) is a common disorder associated with a high socioeconomic burden, particularly in young, physically active, and working patients. Tranexamic acid (TXA) is commonly used in orthopaedic trauma surgery as an antifibrinolytic agent to control excessive bleeding. Previous studies have reported that TXA modulates inflammation and bone cell function, both of which are dysregulated during posttraumatic OA disease progression. Purpose: To evaluate the therapeutic effects of systemic and topical TXA treatment on the progression of posttraumatic OA in the knee of mice. Study Design: Controlled laboratory study. Methods: OA was induced via anterior cruciate ligament (ACL) transection on the right knee of female mice. Mice were treated with TXA or vehicle intraperitoneally daily or intra-articularly weekly for 4 weeks, starting on the day of surgery. Articular cartilage degeneration, synovitis, bone erosion, and osteophyte formation were scored histologically. Micro−computed tomography evaluation was conducted to measure the subchondral bone microstructure and osteophyte volume. Cartilage thickness and bone remodeling were assessed histomorphometrically. Results: Both systemic and topical TXA treatment significantly reduced cartilage degeneration, synovitis, and bone erosion scores and increased the ratio of hyaline to calcified cartilage thickness in posttraumatic OA. Systemic TXA reversed ACL transection-induced subchondral bone loss and osteophyte formation, whereas topical treatment had no effect. Systemic TXA decreased the number and surface area of osteoclasts, whereas those of osteoblasts were not affected. No effect of topical TXA on osteoblast or osteoclast parameters was observed. Conclusion: Both systemic and topical TXA exerted protective effects on the progression of posttraumatic OA. Drug repurposing of TXA may, therefore, be useful for the prevention or treatment of posttraumatic OA, particularly after ACL surgery. Clinical Relevance: TXA might be beneficial in patients with posttraumatic OA of the knee.