Abnormal expression of KDM6A and SOX9 is a key factor in the pathogenesis of osteoarthritis (OA). Cellular treatments of OA with articular cartilage chondrocytes (ACCs) and bone marrow mesenchymal stem cells (BMSCs) are promising, but their underlying mechanisms remain to be explored. The pellet size, weight and sulfated glycosaminoglycan/DNA content of ACCs were measured to evaluate the effect of BMSCs on the chondrogenic differentiation of SCCs. 3‐(4,5‐Dimethylthiazol‐2‐yl)‐2,5‐diphenyltetrazolium bromide (MTT) assay was used to analyze the proliferation of ACCs cultured along or cocultured with BMSCs. Quantitative polymerase chain reaction (qPCR) was performed to evaluate the messenger RNA expression of KDM6A, SOX9, type2 collagen, and Aggrecan in ACCs and OA rats. Western blot and immunohistochemistry were performed to analyze the expression of KDM6A and SOX9 proteins. Bisulfite sequencing PCR was performed to assess the DNA methylation level of the SOX9 promoter. Flow cytometry was used to evaluate the apoptotic status of ACCs. The chondrogenic differentiation of ACCs was significantly enhanced by coculturing with BMSCs, especially under a hypoxic condition. The expression of KDM6A, SOX9, type2 collagen, and Aggrecan was remarkably elevated in ACCs cocultured with BMSCs. Also, the DNA methylation of SOX9 promoter was decreased in ACCs cocultured with BMSCs, along with notably reduced apoptosis. Moreover, ACCs cocultured with BMSCs could repair cartilage lesions and prevent the abnormal expression of KDM6A, SOX9, type2 collagen, and Aggrecan in OA rats. In this study, we cocultured ACCs with BMSCs and used them to treat OA rats. Our findings presented a mechanistic basis for explaining the therapeutic effect of BMSCs on OA treatment. Our data suggested that hypoxia improved the differentiation and proliferation of bone marrow mesenchymal stem cells (BMSCs) by promoting KDM6A expression and activating the SOX9 signaling pathway. This is a novel mechanism underlying the differentiation of BMSCs that highlights a promising future for osteoarthritis (OA) treatment.