ObjectiveWe estimate the treatment effect of total knee arthroplasty (TKA) versus an education and exercise (Edu+Ex) program on pain, function, and quality of life outcomes 3 and 12 months after treatment initiation for knee osteoarthritis (OA).MethodsPatients with knee OA who had undergone TKA were matched on a 1:1 ratio with participants in an Edu+Ex program based on a propensity score fitted to a range of pretreatment covariates. After matching, between‐group differences in improvement (the treatment effect) in Knee Injury and Osteoarthritis Outcome Score 12‐item version (0, worst to 100, best) pain, function, and quality of life from baseline to 3 and 12 months were estimated using linear mixed models, adjusting for unbalanced covariates, if any, after matching.ResultsThe matched sample consisted of 522 patients (Edu+Ex, n = 261; TKA, n = 261) who were balanced on all pretreatment characteristics. At 12‐month follow‐up, TKA resulted in significantly greater improvements in pain (mean difference [MD] 22.8; 95% confidence interval [95% CI] 19.7–25.8), function (MD 21.2; 95% CI 17.7–24.4), and quality of life (MD 18.3; 15.0–21.6). Even so, at least one‐third of patients receiving Edu+Ex had a clinically meaningful improvement in outcomes at 12 months compared with 75% of patients with TKA.ConclusionTKA is associated with greater improvements in pain, function, and quality of life, but these findings also suggest that Edu+Ex may be a viable alternative to TKA in a meaningful proportion of patients, which may reduce overall TKA need. Confirmatory trials are needed.