Osteoarthritis (OA) is the most common degenerative joint disease and no disease-modifying therapy for OA is currently available. Targeting articular cartilage alone may not be sufficient to halt this disease progression. Articular cartilage and subchondral bone act as a functional unit. Increasing evidence indicates that transforming growth factor β (TGFβ) plays a crucial role in maintaining homeostasis of both articular cartilage and subchondral bone. Activation of extracellular matrix (ECM) latent TGFβ at the appropriate time and location is a prerequisite for its function. Aberrant activation of TGFβ in the subchondral bone in response to an abnormal mechanical loading environment induces formation of osteroid islets at the onset of OA. As a result, alteration of subchondral bone structure changes the stress distribution on the articular cartilage and leads to its degeneration. Thus, inhibition of TGFβ activity in the subchondral bone may provide a new avenue of treatment for OA. In this review we will discuss the role of TGFβ in the homeostasis of articular cartilage and subchondral bone as a novel target for OA therapy.