BACKGROUNDOsteoarthritis is a chronic, progressive, and degenerative condition with limited therapy options. Recently, biologic therapies have been an evolving option for the management of osteoarthritis.PURPOSETo assess whether allogenic mesenchymal stromal cells (MSCs) have the potential to improve functional parameters and induce cartilage regeneration in patients with osteoarthritis.STUDY DESIGNRandomized controlled trial; Level of evidence, 1.METHODSA total of 146 patients with grade 2 and 3 osteoarthritis were randomized to either an MSC group or placebo group with a ratio of 1:1. There were 73 patients per group who received either a single intra-articular injection of bone marrow-derived MSCs (BMMSCs; 25 million cells) or placebo, followed by 20 mg per 2 mL of hyaluronic acid under ultrasound guidance. The primary endpoint was the Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) total score. The secondary endpoints were WOMAC subscores for pain, stiffness, and physical function; the visual analog scale score for pain; and magnetic resonance imaging findings using T2 mapping and cartilage volume.RESULTSOverall, 65 patients from the BMMSC group and 68 patients from the placebo group completed 12-month follow-up. The BMMSC group showed significant improvements in the WOMAC total score compared with the placebo group at 6 and 12 months (percentage change: -23.64% [95% CI, -32.88 to -14.40] at 6 months and -45.60% [95% CI, -55.97 to -35.23] at 12 months P < .001; percentage change, -44.3%). BMMSCs significantly improved WOMAC pain, stiffness, and physical function subscores as well as visual analog scale scores at 6 and 12 months (P < .001). T2 mapping showed that there was no worsening of deep cartilage in the medial femorotibial compartment of the knee in the BMMSC group at 12-month follow-up, whereas in the placebo group, there was significant and gradual worsening of cartilage (P < .001). Cartilage volume did not change significantly in the BMMSC group. There were 5 adverse events that were possibly/probably related to the study drug and consisted of injection-site swelling and pain, which improved within a few days.CONCLUSIONIn this small randomized trial, BMMSCs proved to be safe and effective for the treatment of grade 2 and 3 osteoarthritis. The intervention was simple and easy to administer, provided sustained relief of pain and stiffness, improved physical function, and prevented worsening of cartilage quality for ≥12 months.REGISTRATIONCTRI/2018/09/015785 (National Institutes of Health and Clinical Trials Registry-India).