Osteoarthritis is the most common chronic joint disease and a major health care concern due to the lack of efficient treatments. This is mainly related to the local and degenerative nature of this disease. Kartogenin was recently reported as a disease-modifying osteoarthritis drug that promotes cartilage repair, but its therapeutic effect is impeded by its very low solubility. Therefore, we designed a unique nanocrystal-chitosan particle intra-articular delivery system for osteoarthritis treatment that merges the following formulation techniques: nanosize reduction of a drug by wet milling and spray drying. The intermediate formulation (kartogenin nanocrystals) increased the solubility and dissolution rates of kartogenin. The final drug delivery system consisted of an easily resuspendable and ready-to-use microsphere powder for intra-articular injection. Positively charged chitosan microspheres with a median size of approximately 10 µm acted as a mothership drug delivery system for kartogenin nanocrystals in a simulated intra-articular injection. The microspheres showed suitable stability and a controlled release profile in synovial fluid and were nontoxic in human synoviocytes. The cartilage retention skills of the microspheres were also explored ex vivo using cartilage. This drug delivery system shows promise for advancement to preclinical stages in osteoarthritis therapy and scale-up production.