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Osteoarthritis (OA) is a chronic degenerative joint disease characterized by deterioration of articular cartilage. Dual specificity phosphatase 5 (DUSP5), a member of the DUSP subfamily, is known to regulate cellular inflammation. Here, we studied the relationship between DUSP5 and OA by knockdown and overexpression DUSP5, respectively. Results from in vitro experiments demonstrated that the knockdown of DUSP5 increased interleukin-1β (IL-1β)-induced expression of inflammatory genes, such as inducible nitric oxide synthase (iNOS), cyclooxygenase 2 (COX2), and matrix metalloproteinases (MMPs) in chondrocytes, whereas it decreased the expression of anti-inflammatory genes, such as tissue inhibitor of metalloproteinase 3 (TIMP3) and IL-10. Conversely, the overexpression of DUSP5 suppressed the IL-1β-induced expression of iNOS, COX-2, and MMPs, and upregulated the expression of TIMP3 and IL-10. Moreover, knockdown of DUSP5 enhanced the IL-1β-induced activation of NF-κB and ERK pathways, whereas its overexpression inhibited these pathways. DUSP5 overexpression prevented cartilage degeneration in a rat OA model, while its knockdown reversed that effect. Our findings reveal that DUSP5 suppresses IL-1β-induced chondrocyte inflammation by inhibiting the NF-κB and ERK signaling pathways and ameliorates OA.