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Introduction Adiponectin is an adipokine that regulates energy metabolism and insulin sensitivity, but recent studies have pointed also to a role in inflammation and arthritis. The purpose of the present study was to investigate the association and effects of adiponectin on inflammation and cartilage destruction in osteoarthritis (OA). Methods Cartilage and blood samples were collected from 35 male OA patients undergoing total knee replacement surgery. Preoperative radiographs were evaluated using Ahlbäck classification criteria for knee OA. Circulating concentrations of adiponectin and biomarkers of OA, that is, cartilage oligomeric matrix protein (COMP) and matrix metalloproteinase 3 (MMP-3), were measured. Cartilage samples obtained at the time of surgery were cultured ex vivo, and the levels of adiponectin, nitric oxide (NO), IL-6, MMP-1 and MMP-3 were determined in the culture media. In addition, the effects of adiponectin on the production of NO, IL-6, MMP-1 and MMP-3 were studied in cartilage and in primary chondrocyte cultures. Results Plasma adiponectin levels and adiponectin released from OA cartilage were higher in patients with the radiologically most severe OA (Ahlbäck grades 4 and 5) than in patients with less severe disease (Ahlbäck grades 1 to 3). Plasma adiponectin concentrations correlated positively with biomarkers of OA, that is, COMP (r = 0.55, P = 0.001) and MMP-3 (r = 0.34, P = 0.046). Adiponectin was released by OA cartilage ex vivo, and it correlated positively with production of NO (r = 0.43, P = 0.012), IL-6 (r = 0.42, P = 0.018) and MMP-3 (r = 0.34, P = 0.051). Furthermore, adiponectin enhanced production of NO, IL-6, MMP-1 and MMP-3 in OA cartilage and in primary chondrocytes in vitro in a mitogen-activated protein kinase (MAPK)-dependent manner. Conclusions The findings of this study show that adiponectin is associated with, and possibly mediates, cartilage destruction in OA.