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Osteoarthritis (OA) is a degenerative disease associated with joint inflammation, articular cartilage degeneration and subchondral hypertrophy. Small molecules which both ameliorate chondrocyte OA phenotype and activate bone marrow-derived mesenchymal stem cells (BMSCs) chondrogenesis under inflammatory conditions have the therapeutical potential for OA treatment. In this study, we characterized a novel small molecule which could ameliorate OA progression via novel regulating mechanisms. Docosahexaenoic acid (DHA), a bioactive molecule, was screened from a small molecule library and showed anti-inflammatory and chondroprotective effects in OA chondrocytes, as well as ameliorated IL-1β impaired BMSCs chondrogenesis in Wnt/β-catenin and NF-κB signaling dependent manners. Furthermore, Malat1 was found to be the key mediator of DHA-mediating anti-inflammation chondroprotection and chondrogenesis. DHA also rescued cartilage loss and damage in a surgery-induced OA mice model. The elevation of serum Malat1 levels caused by OA was also downregulated by DHA treatment. Taken together, our findings demonstrated that DHA, with a dual-signaling repression property, exerted its anti-inflammation, chondroprotection and chondrogenesis function possibly via regulating Malat1 level, suggesting that it may be a possible drug candidate for OA patients with elevated MALAT1 expression levels.