Osteoarthritis (OA) is the progressive destruction of articular cartilage with severe symptoms, including pain and stiffness. We investigated the anti-osteoarthritic effects of Prunella vulgaris (PV) and Gentiana lutea (GL) extract in primary cultured chondrocytes RAW 264.7 cells in vitro and destabilization of the medial meniscus (DMM)-induced OA mice in vivo. Primary chondrocytes were induced with IL-1β, and RAW 264.7 cells were treated with LPS and co-incubated with either individual extracts of PV and GL or different ratios of PV and GL mixture. For the OA animal model, the medial meniscus (DMM) was destabilized in 9-week-old male C57BL/6 mice. Treatment of individual PV and GL and combination of PV and GL extracts inhibited the mRNA expression level of COX2 in chondrocytes and RAW 264.7 cells. The optimized inhibitory effect was attained with a PV and GL combination at an 8:2 ratio (PG) without cytotoxic effects. PG extracts prevented the expression of catabolic factors (COX2, Mmp3, Mmp9, and Mmp13) and inflammatory mediator levels (PGE2 and collagenase). In addition, PG decreased subchondral sclerosis and increased BMD in the subchondral region of DMM-induced OA mice with protection of articular cartilage destruction by inhibiting inflammatory processes. This study suggests that PG may be an alternative medicinal herb for treatment of OA.