The aim of the present study is to investigate the effects of BMP-7 released from polylactide microspheres on the appearance of various catabolic and inflammatory cytokines secreted by osteoarthritic chondrocytes cultivated in a collagen gel. Articular chondrocytes of 15 patients suffering from osteoarthritis are transferred to a collagen type-I gel. Additionally, BMP-7 encapsulated into polylactide microspheres (50 ng BMP-7/mL gel) is added. After 14 days, gene expression and protein appearance of various genes involved in matrix turnover and inflammation are investigated by immunohistochemical staining and RT-PCR and compared to untreated controls. TNF-α, MMP-13, IL-6, IL-1β, and VEGF gene expressions are decreased in the treatment group. In contrast, BMP-7-induced matrix synthesis is not affected, leaving collagen type-II (Col-II) gene expression to be elevated, while collagen type-I (Col-I) is decreased. In summary, controlled release of low concentrated BMP-7 from polylactide microspheres leads to a decrease in gene expression of the investigated inflammation and matrix degradation markers whereas matrix synthesis is induced.