Osteoarthritis (OA) has a high incidence rate in the elderly population and is a cause of chronic degenerative joint disease. Current therapeutic approaches to OA are effective but come with some side effects. Therefore, it is urgent to find new safe and effective OA treatments. This study aimed to clarify the function of taraxasterol (TAX) isolated from Taraxacum officinale in the papain-induced rat OA model. We observed that TAX alleviated the typical OA-caused phenomena in the joint. The expression of serum inflammatory mediators such as TNF-α, IL-6, and IL-1β was also repressed by TAX. In addition, NF-κB signaling pathway was repressed by TAX. Furthermore, two microRNAs: miR-140 and miR-146a were elevated after TAX treatment in OA rat model. Interestingly, several common targets of miR-140 and miR-146a, including HSPA4L, ST5, and ERBB4, were confirmed to be regulated by TAX. Inflammatory response related genes including S100A8, CCL3, A2M, LBP, and CCR1 were repressed by TAX in OA rat model. In summary, TAX inhibits inflammation in osteoarthritis rat model. Inflammatory mediators, NF-κB pathway and miR-140/miR-146a targets mediate the function of TAX.