Osteoarthritis (OA) is a chronic degenerative bone and joint disease common in middle-aged and elderly people. Currently, there is no satisfactory pharmacological treatment. Eugenol is a phenolic compound that has been shown to exert biological anti-inflammatory, antioxidant, and antiapoptotic effects in multiple systems and organs of the human body. However, its therapeutic effect on OA is unclear. This study examined the effect of eugenol on OA using an anterior cruciate ligament transection (ACLT) model in mice and its related signaling pathways in interleukin-1β (IL-1β)-stimulated human chondrocytes. A certain concentration of eugenol inhibited the decrease in cell viability induced by IL-1β or carbonyl cyanide 3-chlorophenylhydrazone (CCCP). In vitro, eugenol effectively inhibited CCCP-induced chondrocyte apoptosis and mitochondrial membrane potential changes and inhibited the expressions of ADAMTS4 and MMP13 upregulated by IL-1β. In vivo, ACLT induced destruction of the articular cartilage and subchondral bone of the mouse tibial plateau, while eugenol effectively protected the cartilage and subchondral bone from such damage. At the same time, eugenol reduced the ACLT-induced upregulation of ADAMTS4 and MMP13 and the downregulation of type II collagen (COLII) and aggrecan in the mouse knee cartilage. Eugenol also inhibited the increased expression of cartilage metabolism signaling molecules such as C-telopeptides of COLII (CTX-II) in ACLT-induced mouse serum. Consistent with the specific changes in the messenger RNA chip, eugenol inhibited the phosphorylation of JAK3 and STAT4 induced by IL-1β. Together, these results suggest eugenol as an effective new drug for the prevention and treatment of OA.