This study investigated the effect of human placenta extract (HPE) on cartilage degradation in vitro MG-63 cells, articular cartilage explants, and in vivo monoiodoacetate (MIA)-induced osteoarthritis (OA). Matrix metalloproteinase (MMP)-2 activity was measured in HPE-treated osteoblastic MG-63 cells. Articular cartilage explants in rabbit were cultured, and the degree of proteoglycan (PG) degradation was assessed by measuring the amount of glycosaminoglycan (GAG) released into the culture medium. Experimental osteoarthritis was induced by intra-articular injection of 3 mg MIA in rats. Beginning 14 d post-MIA injection, HPE was administered intra-articularly once a day for 14 d. The knee joints were assessed by roentgenography, histology, and gelatinase activity. HPE inhibited PG degradation in articular cartilage explants. HPE significantly reduced deformity of knee joints and suppressed the histological change in MIA-induced OA. HPE inhibited MMP-2 activity in MG-63 cells. MMP-2 and -9 activities were also reduced in the cartilages of HPE-treated knee joints. Our results indicate that HPE has therapeutic effects on OA by protecting cartilage.