Subjects lacking Nfat1 display osteoarthritis in weight-bearing joints. Osteoarthritic changes associated with Nfat1 deficiency are characterized by articular cartilage degradation, articular chondrocyte proliferation/clustering, progressive articular surface destruction, periarticular chondro-osteophyte formation, and exposure of thickened subchondral bone. Methods of treating osteoarthritis, methods of diagnosis and early prediction of the onset of osteoarthritis, and methods for screening drug candidates that may be useful for treatment of osteoarthritis are presented.