Osteoarthritis is a common joint disease that disrupts the lives of millions of people worldwide. To date, a safe and reliable treatment has not yet been announced. Excessive production of pro-inflammatory cytokines such as TNF-α plays an important role in the pathological development of OA. Dehydrocostus lactone (DHC) is a kind of sesquiterpene isolated from medicinal plants that has been demonstrated to play a protective role in inflammation and tumor formation. However, the effects of DHC in OA hasn’t been reported before. In the present study, we investigated the antioxidant and protective effects of DHC in human chondrocytes against insult from tumor necrosis factor-α (TNF-α). We found that DHC inhibited oxidative stress by suppressing the production of reactive oxygen species (ROS) from TNF-α stimulation. Furthermore, DHC decreased the expression of pro-inflammatory cytokines induced by TNF-α, such as interleukin-1β (IL-1β) and interleukin-6 (IL-6). Importantly, DHC prevented the degradation of type II collagen and aggrecan, which are the main components of the extracellular matrix (ECM), by inhibiting the overexpression of matrix metalloproteinases (MMPs) and a disintegrin and metalloproteinase with a thrombospondin type 1 motif (ADAMTS) induced by TNF-α. Mechanistically, DHC ameliorated the inflammatory response and degeneration of the articular extracellular matrix (ECM) by suppressing nuclear factor-κB (NF-κB) activation. Our results reveal that DHC possesses a beneficial effect against TNF-α-mediated insult in human chondrocytes, implying a potential role for DHC in the treatment of osteoarthritis (OA).