The aim of this work was to develop a transdermal delivery system consisting of a glucosamine sulfate-laden xanthan hydrogel containing a nanoemulsion-loaded diacerein. The system was intended to prevent cartilage degradation typical of osteoarthritis. The nanoemulsion, made of soybean oil as the oil phase; soybean lecithin, Tween 80, and poloxamer 407 as surfactants; and propylene glycol as cosurfactant, was formed within the hydrogel. The hydrodynamic diameter of the nanoemulsion globules was 81.95 ± 0.256 nm with 0.285 ± 0.036 of PDI value and the zeta potential value of the formulation was 39.33 ± 0.812 mV. CryoSEM and TEM studies revealed the uniform morphology of the vehicle. A rheological study exposed the nanoemulsion-loaded hydrogel as a thixotropic system. Satisfactory storage stability under ICH conditions was established by the zeta potential and rheological studies. Furthermore, skin biocompatibility of the hydrogel was ascertained on the basis of skin irritation study. Additionally, the diffusion of the drugs across rat skin followed a controlled non-Fickian anomalous steady mechanism. Following in vivo administration in experimental osteoarthritis, the transdermal hydrogel showed a reduction in tumor necrosis factor-alpha, C-reactive protein, high mobility group box protein, and monocyte chemoattractant protein-1. Finally, histopathological analysis of the animals showed satisfactory chondroprotection in the in vivo study. In conclusion, the developed transdermal systems showed a potential against the progression of experimental osteoarthritis.