Osteoarthritis (OA) is the most common age-related degenerative joint disease and platelet-rich plasma (PRP) has been shown to be beneficial in OA. Therefore, in this study, we aimed to investigate the effects of platelets on chondrocytes and the underlying mechanisms. Anabolic and catabolic activity and the proliferation rate of chondrocytes were evaluated after co-culture with platelets. Chondrocyte gene expression was measured by real-time PCR. Chondrocyte protein expression and phosphorylation were measured by western blot. Chondrocytes treated with or without platelets were transplanted into a rat model of OA induced by intra-articular injection of monosodium iodoacetate and the repair of articular cartilage was evaluated macroscopically and histologically. Platelets significantly promoted the proliferation of chondrocytes, while mildly influencing anabolic and catabolic activity. Chondrocytes co-cultured with platelets showed significantly increased production of bone morphogenetic protein 7 (BMP7). The autocrine/paracrine effect of BMP7 was responsible for the increased proliferation of chondrocytes, via the ERK/CDK1/cyclin B1 signaling pathway. Transplantation of platelet-treated chondrocytes showed better cartilage repair in the OA model. Platelet-derived ADP was identified as the major mediator to promote the production of BMP7 and the proliferation of chondrocytes, through the ADP receptor P2Y1. Finally, direct injection of α,β-methyleneadenosine-5'-diphosphate into OA joints also enhanced cartilage repair. This study has identified that platelet-derived ADP, but not ATP, is the key mediator for platelet-promoted chondrocyte proliferation and cartilage repair in osteoarthritis. This finding may provide a key explanation for the therapeutic effect of platelets in OA and help shaping a strategy to improve OA therapy.