Binding of the chemokine stromal cell-derived factor-1 (SDF-1) to its receptor C-X-C chemokine receptor type 4 (CXCR4) results in receptor activation and the subsequent release of matrix metalloproteinases (MMPs) that contribute to osteoarthritis (OA) cartilage degradation. As hypoxia is a defining feature of the chondrocyte microenvironment, the present study investigated the possible mechanism through which SDF-1 induces cartilage degradation under hypoxic conditions. To do this, OA chondrocyte cultures and patient tissue explants pretreated with the CXCR4 inhibitor, AMD3100 were incubated with SDF-1. It was identified that hypoxic conditions significantly elevated the expression of CXCR4 in osteoarthritic chondrocytes relative to normoxic conditions. Furthermore, SDF-1 elevated MMP-13 mRNA levels and proteinase activity. It also elevated the mRNA and protein levels of runt-related transcription factor 2, and induced the release of glycosaminoglycans and the inflammatory cytokine, interleukin-1 beta. By contrast, such changes did not occur to an appreciable degree in cells that were pretreated with AMD3100. The results of the present study demonstrate that even under hypoxic conditions, where CXCR4 expression is significantly elevated in chondrocytes, AMD3100 effectively blocks this receptor and protects chondrocytes from OA-induced catabolism, suggesting that the successful inhibition of CXCR4 may be an effective approach for OA treatment.