Osteoarthritis (OA) is the most common degenerative joint disease; however, its etiopathogenesis is not completely understood. Here we show a role for NUDT7 in OA pathogenesis. Knockdown of NUDT7 in normal human chondrocytes results in the disruption of lipid homeostasis. Moreover, Nudt7^-/- mice display significant accumulation of lipids via peroxisomal dysfunction, upregulation of IL-1β expression, and stimulation of apoptotic death of chondrocytes. Our genome-wide analysis reveals that NUDT7 knockout affects the glycolytic pathway, and we identify Pgam1 as a significantly altered gene. Consistent with the results obtained on the suppression of NUDT7, overexpression of PGAM1 in chondrocytes induces the accumulation of lipids, upregulation of IL-1β expression, and apoptotic cell death. Furthermore, these negative actions of PGAM1 in maintaining cartilage homeostasis are reversed by the co-introduction of NUDT7. Our results suggest that NUDT7 could be a potential therapeutic target for controlling cartilage-degrading disorders.