Osteoarthritis affects the whole joint structure with progressive changes in cartilage, menisci, ligaments and subchondral bone, and synovial inflammation. Biomarkers are being developed to quantify joint remodelling and disease progression. This article was prepared following a working meeting of the European Society for Clinical and Economic Aspects of Osteoporosis and Osteoarthritis convened to discuss the value of biochemical markers of matrix metabolism in drug development in osteoarthritis. The best candidates are generally molecules or molecular fragments present in cartilage, bone or synovium and may be specific to one type of joint tissue or common to them all. Many currently investigated biomarkers are associated with collagen metabolism in cartilage or bone, or aggrecan metabolism in cartilage. Other biomarkers are related to non-collagenous proteins, inflammation and/or fibrosis. Biomarkers in osteoarthritis can be categorised using the burden of disease, investigative, prognostic, efficacy of intervention, diagnostic and safety classification. There are a number of promising candidates, notably urinary C-terminal telopeptide of collagen type II and serum cartilage oligomeric protein, although none is sufficiently discriminating to differentiate between individual patients and controls (diagnostic) or between patients with different disease severities (burden of disease), predict prognosis in individuals with or without osteoarthritis (prognostic) or perform so consistently that it could function as a surrogate outcome in clinical trials (efficacy of intervention). Future avenues for research include exploration of underlying mechanisms of disease and development of new biomarkers; technological development; the 'omics' (genomics, metabolomics, proteomics and lipidomics); design of aggregate scores combining a panel of biomarkers and/or imaging markers into single diagnostic algorithms; and investigation into the relationship between biomarkers and prognosis.