Osteoarthritis (OA) is the leading cause of physical disability, predicted to affect 67 million people in the United States by 2030 and is the most common degenerative joint disorders. There is no effective treatment for OA until the end-stage of the disease necessitating joint replacement. Despite the significant progress made in the investigation of articular cartilage degeneration at relative late stage of OA, little is known abot the onset pathomechanisms of OA. Currently, most of the efforts that are investigating the mechanism of articular cartilage degeneration in OA are in the late stage of OA. In this revised proposal, we have demonstrated that inducible knockout of TGF type II receptor in the nestin+ MSCs prevents degeneration of articular cartilage in the mouse anterior cruciate ligament transection (ACLT) joints; administration of TGF antibody in the subchondral bone reduces articular cartilage degeneration in rat ACLT joints and systemically injection of TRI inhibitor also rescued guinea pig spontaneous OA. These results suggest that high levels of active TGF1 in the subchondral bone are the onset pathological changes in ACLT animal models, guinea pig spontaneous OA and human knee OA. Particularly, protection of guinea pig spontaneous OA by TRI inhibitor integrate the observation of high levels of active TGF in the subchondral bone in the knee joints of OA patient and the data from ACLT animal models. Thus, activation of TGF in the subchondral bone represents onset of OA development. Thus, specific inhibition of TGF activity in the subchondral bone could lead to an effective therapy for OA. Therefore, we hypothesize that high levels of active TGFin the subchondral bone induce pathological changes of OA. In this proposed study, we will focus on the initial events during development of OA and will investigate the effects of TGF-induced microenvironment changes of MSCs and osteoprogenitors on the changes of osteochondral junction using inducible nestin/cre/GFP/ROSA26 or osterix/cre/GFP/ROSA26 mice, in which the changes of GFP-positive nestin+ MSCs and osterix+ osteoprogenitors will be traced during development of OA in ACLT mice. We will also examine the role of TGF in the subchondral bone and articular cartilage of human OA knee joints. The effects of inhibition of TGF activity in the subchondral bone on rat ACLT OA and spontaneous guinea pig OA joints will be systematically studied.