Introduction. Reactive oxygen species (ROS) induced by extracellular cytokines trigger the expression of inflammatory mediators in osteoarthritis (OA) chondrocyte. Peroxisome proliferator-activated receptor gamma (PPARγ) exerts an anti-inflammatory effect. The aim of this study was to elucidate the role of PPARγ in interleukin-1β- (IL-1β-) induced cyclooxygenase-2 (COX-2) and prostaglandin E2 (PGE2) expression through ROS generation in OA chondrocytes. Methods. IL-1β-induced ROS generation and chondrocyte apoptosis were determined by flow cytometry. Contents of NADPH oxidase (NOX), caspase-3, and caspase-9 were evaluated by biochemical detection. The involvement of NOX2 and mitogen-activated protein kinases (MAPKs) in IL-1β-induced COX-2 and PGE2 expression was investigated using pharmacologic inhibitors and further analyzed by western blotting. Activation of PPARγ was performed by using a pharmacologic agonist and was analyzed by western blotting. Results. IL-1β-induced COX-2 and PGE2 expression was mediated through NOX2 activation/ROS production, which could be attenuated by N-acetylcysteine (NAC; a scavenger of ROS), GW1929 (PPARγ agonist), DPI (diphenyleneiodonium chloride, NOX2 inhibitor), SB203580 (p38MAPK inhibitor), PD98059 (extracellular signal-regulated kinase, ERK inhibitor), and SP600125 (c-Jun N-terminal kinase, JNK inhibitor). ROS activated p38MAPK to enter the nucleus, which was attenuated by PPARγ. Conclusion. In OA chondrocytes, IL-1β induced COX-2 and PGE2 expression via activation of NOX2, which led to ROS production and MAPK activation. The activation of PPARγ exerted protective roles in the pathogenesis of OA.