Objectives: To investigate how the genetic susceptibility gene DIO2 confers risk to osteoarthritis (OA) onset in humans and to explore whether counteracting the deleterious effect could contribute to novel therapeutic approaches. Methods: Epigenetically regulated expression of DIO2 was explored by assessing methylation of positional CpG-dinucleotides and the respective DIO2 expression in OA-affected and macroscopically preserved articular cartilage from end-stage OA patients. In a human in vitro chondrogenesis model, we measured the effects when thyroid signalling during culturing was either enhanced (excess T3 or lentiviral induced DIO2 overexpression) or decreased (iopanoic acid). Results: OA-related changes in methylation at a specific CpG dinucleotide upstream of DIO2 caused significant upregulation of its expression (β=4.96; p=0.0016). This effect was enhanced and appeared driven specifically by DIO2 rs225014 risk allele carriers (β=5.58, p=0.0006). During in vitro chondrogenesis, DIO2 overexpression resulted in a significant reduced capacity of chondrocytes to deposit extracellular matrix (ECM) components, concurrent with significant induction of ECM degrading enzymes (ADAMTS5, MMP13) and markers of mineralisation (ALPL, COL1A1). Given their concurrent and significant upregulation of expression, this process is likely mediated via HIF-2α/RUNX2 signalling. In contrast, we showed that inhibiting deiodinases during in vitro chondrogenesis contributed to prolonged cartilage homeostasis as reflected by significant increased deposition of ECM components and attenuated upregulation of matrix degrading enzymes. Conclusions: Our findings show how genetic variation at DIO2 could confer risk to OA and raised the possibility that counteracting thyroid signalling may be a novel therapeutic approach.