The metabolic activity of chondrocytes in articular cartilage is influenced by alterations in the osmotic environment of the tissue, which occur secondary to mechanical compression. The mechanism by which osmotic stress modulates cell physiology is not fully understood and may involve changes in the physical properties of the membrane or the cytoskeleton. The goal of this study was to determine the effect of the osmotic environment on the mechanical and physical properties of chondrocytes. In isoosmotic medium, chondrocytes exhibited a spherical shape with numerous membrane ruffles. Normalized cell volume was found to be linearly related to the reciprocal of the extracellular osmolality (Boyle van’t Hoff relationship) with an osmotically active intracellular water fraction of 61%. In deionized water, chondrocytes swelled monotonically until lysis at a mean apparent membrane area 234 ± 49% of the initial area. Biomechanically, chondrocytes exhibited viscoelastic solid behavior. The instantaneous and equilibrium elastic moduli and the apparent viscosity of the cell were significantly decreased by hypoosmotic stress, but were unchanged by hyperosmotic stress. Changes in the viscoelastic properties were paralleled by the rapid dissociation and remodeling of cortical actin in response to hypoosmotic stress. These findings indicate that the physicochemical environment has a strong influence on the viscoelastic and physical properties of the chondrocyte, potentially through alterations in the actin cytoskeleton.