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Background: Musculoskeletal tissue degeneration impairs the life quality and function of many people. Meniscus degeneration is a major origin of knee osteoarthritis and a common threat to athletic ability, but its cellular mechanism remains elusive. Methods: We built a cell atlas of 12 healthy or degenerated human meniscus samples from the inner and outer meniscal zones of 8 patients using scRNA-seq to investigate meniscal microenvironment homeostasis and its changes in the degeneration process and verified findings with immunofluorescent imaging. Results: We identified and localized cell types in inner and outer meniscus and found new chondrocyte subtypes associated with degeneration. The observations suggested understandings on how cellular compositions, functions, and interactions participated in degeneration, and on the possible loop-like interactions among extracellular matrix disassembly, angiogenesis, and inflammation in driving the degeneration. Conclusions: The study provided a rich resource reflecting variations in the meniscal microenvironment during degeneration and suggested new cell subtypes as potential therapeutic targets. The hypothesized mechanism could also be a general model for other joint degenerations. Funding: The National Natural Science Foundation of China (81972123, 82172508, 62050178, 61721003), the National Key Research and Development Program of China (2021YFF1200901), Fundamental Research Funds for the Central Universities (2015SCU04A40); The Innovative Spark Project of Sichuan University (2018SCUH0034); Sichuan Science and Technology Program (2020YFH0075); Chengdu Science and Technology Bureau Project (2019-YF05-00090-SN); 1.3.5 Project for Disciplines of Excellence of West China Hospital Sichuan University (ZYJC21030, ZY2017301); 1.3.5 Project for Disciplines of Excellence – Clinical Research Incubation Project, West China Hospital, Sichuan University (2019HXFH039).