Besides conventional norms that recognize synovial fluid (SF) as a joint lubricant, nutritional channel, and a diagnostic tool in knee osteoarthritis (kOA), based on the authors previous studies, this study aims to define functional role of SF in kOA. U937, a monocytic, human myeloid cell line, was induced with progressive grades of kOA SF, and the induction response was assessed on various pro-inflammatory parameters. This 'SF challenge test model' was further extended to determine the impact of SF on U937 differentiation using macrophage-specific markers and associated transcription factor genes. Mitochondrial membrane potential changes in SF-treated cells were evaluated with fluorescent JC-1 probe. a significant increase in nitric oxide, matrix metalloproteinase () 1, 13, and vascular endothelial growth factor ()-1 was noted in the induced cells. A marked increase was seen in , , and the transcription factors -activator protein , interferon regulatory factor , and signal transducer and activator of transcription in the SF-treated cells indicating active monocytes to macrophage differentiation. Reduced mitochondrial membrane potential was reflected by a reduced red-to-green ratio in JC-1 staining. these results underline the active role of OA SF in stimulating and maintaining inflammation in joint cells, fostering monocyte differentiation into pro-inflammatory macrophages. The decline in the membrane potential suggestive of additional inflammatory pathway in OA via the release of pro-apoptotic factors and damaged associated molecular patterns (DAMPs) within the cells. Overall, biochemical modulation of SF warrants a potential approach to intervene inflammatory cascade in OA and mitigate its progression.