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Osteoarthritis (OA) is caused by an imbalance in the synthesis and degradation of cartilage tissue by chondrocytes. Therefore, a therapeutic agent for OA patients that can positively affect both synthesis and degradation is needed. However, current nonsurgical treatments for OA can barely achieve satisfactory long-term outcomes in cartilage repair. Human fetal cartilage progenitor cells-secretome (ShFCPC) has shown potent anti-inflammatory and tissue-repair effects; however, its underlying mechanisms and effects on OA have rarely been systematically elucidated. This study aims to analyze and evaluate the potency of ShFCPC in modifying OA process. Herein, secreted proteins enriched in ShFCPC have been characterized, and their biological functions both in vitro and in vivo in an OA model are compared with those of human bone marrow-derived mesenchymal stem cells-secretome (ShBMSC) and hyaluronan (HA). Secretome analysis has shown that ShFCPC is significantly enriched with extracellular matrix molecules involved in many effects of cellular processes required for homeostasis during OA progression. Biological validation in vitro has shown that ShFCPC protects chondrocyte apoptosis by suppressing the expression of inflammatory mediators and matrix-degrading proteases and promotes the secretion of pro-chondrogenic cytokines in lipopolysaccharide-induced coculture of human chondrocytes and SW982 synovial cells compared with ShBMSC. Moreover, in a rat OA model, ShFCPC protects articular cartilage by reducing inflammatory cell infiltration and promoting M2 macrophage polarization in the synovium, which directly contributes to an increase in immunomodulatory atmosphere and enhances cartilage repair compared to ShBMSC and HA. This shows great potential for ShFCPC as a novel agent for modifying OA process.