Interleukin-1β (IL-1β) and nerve growth factor (NGF) are key regulators in the pathogenesis of inflammatory arthritis; specifically, IL-1β is involved in tissue degeneration and NGF is involved in joint pain. However, the cellular and molecular interactions between IL-1β and NGF in articular cartilage are not known. Cartilage stem/progenitor cells (CSPCs) have recently been identified in osteoarthritic (OA) cartilage on the basis of their migratory properties. Here we hypothesize that IL-1β/NGF signaling is involved in OA cartilage degeneration by targeting CSPCs. NGF and NGF receptor (NGFR: TrkA and p75NTR) expression in healthy and OA human articular cartilage and isolated chondrocytes was determined by immunostaining, qRT-PCR, flow cytometry and western blot. Articular cartilage derived stem/progenitor cells were collected and identified by stem/progenitor cell characteristics. 3D-cultured CSPC pellets and cartilage explants were treated with NGF and NGF neutralizing antibody, and extracellular matrix changes were examined by sulfated glycosaminoglycan (GAG) release and MMP expression and activity. Expression of NGF, TrkA and p75NTR was found to be elevated in human OA cartilage. Cellular changes upon IL-1β and/or NGF treatment were then examined. NGF mRNA and NGFR proteins levels were upregulated in cultured chondrocytes exposed to IL-1β. NGF was chemotactic for cells isolated from OA cartilage. Cells isolated on the basis of their chemotactic migration towards NGF demonstrated stem/progenitor cell characteristics, including colony-forming ability, multi-lineage differentiation potential, and stem cell surface markers. The effects of NGF perturbation in cartilage explants and 3D-cultured CSPCs were next analyzed. NGF treatment resulted in extracellular matrix catabolism indicated by increased sGAG release and MMP expression and activity; conversely, treatment with NGF neutralizing antibody inhibited increased MMP levels, and enhanced tissue inhibitor of matrix metalloprotease-1 (TIMP1) expression in OA cartilage explants. NGF blockade with neutralizing antibody also affected cartilage matrix remodeling in 3D-CSPC pellet cultures. Our results strongly suggest that NGF signaling is a contributing factor in articular cartilage degeneration in OA, which likely targets a specific subpopulation of progenitor cells, the CSPCs, affecting their migratory and matrix remodeling activities. These findings provide novel cellular/signaling therapeutic targets in osteoarthritic cartilage.