In osteoarthritis (OA) articular chondrocytes undergo phenotypic changes culminating in the progressive loss of cartilage from the joint surface. The molecular mechanisms underlying these changes are poorly understood. Here we report enhanced (approximately 7-fold) expression of F-spondin, a neuronal extracellular matrix glycoprotein, in human OA cartilage (P<0.005). OA-specific up-regulation of F-spondin was also demonstrated in rat knee cartilage following surgical menisectomy. F-spondin treatment of OA cartilage explants caused a 2-fold increase in levels of the active form of TGF-beta1 (P<0.01) and a 10-fold induction of PGE2 (P<0.005) in culture supernatants. PGE2 induction was found to be dependent on TGF-beta and the thrombospondin domain of the F-spondin molecule. F-spondin addition to cartilage explant cultures also caused a 4-fold increase in collagen degradation (P<0.05) and a modest reduction in proteoglycan synthesis (approximately 20%; P<0.05), which were both TGF-beta and PGE2 dependent. F-spondin treatment also led to increased secretion and activation of MMP-13 (P<0.05). Together these studies identify F-spondin as a novel protein in OA cartilage, where it may act in situ at lesional areas to activate latent TGF-beta and induce cartilage degradation via pathways that involve production of PGE2.