Objective To investigate the therapeutic effect and mechanism of Gubi powder on osteoarthritis. Methods New Zealand white rabbits were divided into a blank group, model group, positive group (diclofenac potassium gel), and Gubi powder group (n = 6 rabbits per group). A rabbit knee osteoarthritis model was constructed using the modified Hulth method, and the treatments were administered for 4 weeks after 8 weeks of modeling. Cartilage thickness was measured by toluidine blue staining and the Mankin score was derived after Muscovite O staining of cartilage tissue. Terminal deoxynucleotidyl transferase dUTP nick end labeling fluorescence staining was used to detect the apoptosis of chondrocytes in cartilage tissue. Collagen (Col) Ⅱ and collagen X protein expression levels in cartilage tissue were detected by immunohistochemistry and expression levels of Bax, cleaved-caspase-3, phospho (p) extracellular signalregulated kinase (ERK), p-p38, p-Smad2, p-Smad3, and transforming growth factor (TGF)-β1 in cartilage tissues were detected by Western blot. Results Cartilage thickness was decreased, the Mankin score and chondrocyte apoptosis rate were increased, Col Ⅱ, p-Smad2, p-Smad3, and TGF-β1 protein expression levels were decreased, and Col X, Bax, cleaved-caspase-3, p-ERK, and p-p38 levels were increased in the model group compared with the control group. Cartilage thickness was increased, the Mankin score and chondrocyte apoptosis rate were decreased, Col Ⅱ, p-Smad2, p-Smad3, and TGF-β1 expression levels were increased, and Col X, Bax, cleaved-caspase-3, p-ERK, and p-p38 protein expression were decreased in the positive and Gubi powder groups compared with the model group. Conclusions Gubi powder showed good therapeutic efficacy against osteoarthritis in rabbits, by reducing chondrocyte apoptosis, stabilizing cartilage tissue structure, and promoting the regeneration and repair of cartilage tissue after injury. Its mechanism may be related to inhibition of the ERK/ P38 pathway and activation of the TGF-β/ Smad pathway.