Objective: Transforming growth factor-b (TGFb) is a major regulator of cartilage homeostasis and its deregulation has been associated with osteoarthritis (OA). Deregulation of the TGFb pathway in mesenchymal stem cells (MSCs) has been proposed to be at the onset of OA. Using a secretome analysis, we identified a member of the TGFb family, TGFb-induced protein (TGFbi or bIGH3), expressed in MSCs and we investigated its function and regulation during OA. Design: Cartilage, bone, synovium, infrapatellar fat pad and bone marrow-MSCs were isolated from patients with OA or healthy subjects. Chondrogenesis of BM-MSCs was induced by TGFb3 in micropellet culture. Expression of TGFbi was quantified by RT-qPCR, ELISA or immunohistochemistry. Role of TGFbi was investigated in gain and loss of function experiments in BM-MSCs and chondrocytes. Results: TGFbi was up-regulated in early stages of chondrogenesis and its knock-down in BM-MSCs resulted in the down-regulation of mature and hypertrophic chondrocyte markers. It likely occurred through the modulation of adhesion molecules including integrin (ITG)b1, ITGb5 and N-cadherin. We also showed that TGFbi was upregulated in vitro in a model of OA chondrocytes, and its silencing enhanced the hypertrophic marker type X collagen. In addition, TGFbi was up-regulated in bone and cartilage from OA patients while its expression was reduced in BM-MSCs. Similar findings were observed in a murine model of OA. Conclusions: Our results revealed a dual role of TGFbi during chondrogenesis and pointed its deregulation in OA joint tissues. Modulating TGFbi in BM-MSCs might be of interest in cartilage regenerative medicine.