Osteoarthritis (OA) is the most common form of joint disease. Histopathologically, OA is characterized by a progressive loss of articular cartilage, osteophyte formation, thickening of subchondral bone, and subchondral cyst formation. All current therapies are aimed at symptomatic control and have limited impacts on impeding or reversing the histopathologic progression to advanced OA. Previous studies have shown that overexpression of matrix-degrading proteinases and proinflammatory cytokines is associated with osteoarthritic cartilage degradation. However, clinical trials applying an inhibitor of proteinases or proinflammatory cytokines have been unsuccessful. A more sophisticated understanding of the regulatory mechanisms that control the function of articular chondrocytes is paramount to developing effective treatments. Since multiple catabolic factors and pathological chondrocyte hypertrophy are involved in the development of OA, it is important to identify which upstream factors regulate the expression of catabolic molecules and/or chondrocyte hypertrophy in articular cartilage. This review summarizes the current studies on the molecular regulation, with a main focus on transcriptional regulation, of the function of adult articular chondrocytes and its significance in the pathogenesis and treatment of OA. Recent studies have discovered that transcription factor Nfat1 may play an important role in maintaining the physiological function of adult articular chondrocytes. Nfat1-deficient mice exhibit normal skeletal development but display most of the features of human OA as adults, including chondrocyte hypertrophy with overexpression of specific matrix-degrading proteinases and proinflammatory cytokines in adult articular cartilage. ß-catenin transcriptional signaling in articular chondrocytes may also be involved in the pathogenesis of OA. Activation of ß-catenin leads to OA-like phenotypes with overexpression of specific matrix-degrading proteinases in articular cartilage of adult mice. These and other regulatory mechanisms described in this review may provide new insights into the pathogenesis of OA and the development of novel therapeutic targets for the treatment of OA.