Neuropeptide Y (NPY) is known to regulate bone homeostasis;​ however, its functional role as a risk factor during osteoarthritis (OA) remains elusive. In this study, we aim to investigate the direct effect of NPY on degradation of cartilage and progression of OA and explore the molecular events involved. NPY was overexpressed in human OA cartilage accompanied with increased expression of NPY1 receptor (NPY1R) and NPY2 receptor (NPY2R). Stressors such as cold exposure resulted in the peripheral release of NPY from sympathetic nerves, which in turn promoted upregulation of NPY and NPY2R in articular cartilage in vivo. Intra‐articular administration of NPY significantly promoted chondrocyte hypertrophy and cartilage matrix degradation, with a higher OARSI score than that of control mice, whereas inhibition of NPY2R but not NPY1R with its specific antagonist remarkably ameliorated NPY‐mediated effects. Moreover, NPY activated mTORC1 pathway in articular chondrocytes, whereas the administration of rapamycin (an mTORC1 inhibitor) in vitro abrogated NPY‐mediated effects. Mechanistically, mTORC1 downstream kinase S6K1 interacted with and phosphorylated SMAD1/5/8 and promoted SMAD4 nuclear translocation, resulting in upregulation of Runx2 expression to promote chondrocyte hypertrophy and cartilage degradation. In conclusion, our findings provided the direct evidence and the crucial role of NPY in cartilage homeostasis.