Articular cartilage injury can result in chondrocyte loss and diminishment of specialised extracellular matrix, which can progress to an osteoarthritic (OA) phenotype. Stem cells have emerged as a favourable approach for articular cartilage regeneration. Identification of miRNAs which influence stem cell fate offers new approaches for application of miRNAs to regenerate articular cartilage. Skeletal stem cells (SSCs) isolated from human bone marrow were cultured as high density micromass' using TGF-β3 to induce chondrogenesis. qPCR and TaqMan qPCR were used to assess chondrogenic gene and miRNA expression. Target prediction algorithms identified potential targets of miR-146b. Transient transfection with miR-146b mimic and western blotting was used to analyse SOX5. Human OA articular chondrocytes were examined for miR-146b expression. Chondrogenic differentiation of human bone marrow derived SSCs resulted in significant down-regulation of miR-146b. Gain of miR-146b function resulted in down-regulation of SOX5. MiR-146b expression was up-regulated in OA chondrocytes. These findings demonstrate the functional role of miR-146b in the chondrogenic differentiation of human bone marrow derived SSCs. MiR-146b may play a role in the pathophysiology of OA. Application of miR-146b combined with stem cell therapy could enhance regeneration of cartilaginous tissue and serve as a potential therapeutic target in the treatment of OA.