Osteoarthritis (OA) is a major cause of joint pain and disability, resulting in large socioeconomic costs worldwide. Isofraxidin (ISO), a bioactive coumarin compound isolated from the functional foods Siberian ginseng and Apium graveolens, exerts anti-inflammatory effects in a variety of diseases. However, no studies have reported the protective effects of ISO against OA development. Accordingly, this study aimed to assess the therapeutic effect of ISO in human OA chondrocytes, and in a mouse model of OA induced by destabilisation of the medial meniscus (DMM). In vitro, lipopolysaccharide (LPS)-induced overproduction of nitric oxide (NO), prostaglandin E2 (PGE2), tumour necrosis factor-alpha (TNF-α) and interleukin-6 (IL-6) was decreased by ISO pre-treatment. Furthermore, ISO attenuated the increased expression of inflammatory enzymes, including inducible nitric oxide synthase (iNOS) and cyclooxygenase-2 (COX-2), in response to LPS stimulation. Meanwhile, LPS-induced extracellular matrix (ECM) degradation was also reversed by ISO treatment. Mechanistically, ISO competitively inhibited Toll-like receptor 4 (TLR4)/myeloid differentiation protein-2 (MD-2) complex formation, and thus TLR4/nuclear factor kappa B (NF-κB) signalling cascades. In vivo, ISO treatment not only prevented the calcification and erosion of cartilage, as well as the thickening of subchondral bone, but also reduced the serum levels of inflammatory cytokines in the mouse OA model. Taken together, these data suggest that ISO has potential in the treatment of OA.