Changes in extracellular osmolality have been shown to alter gene expression patterns and metabolic activity of various cell types, including chondrocytes. However, mechanisms by which physiological or pathological changes in osmolality impact chondrocyte function remain unclear. Here we use quantitative image analysis, electron microscopy, and a DNase I assay to show that hyperosmotic conditions (>400 mOsm/kg) induce chromatin condensation, while hypoosmotic conditions (100 mOsm/kg) cause decondensation. Large density changes (p < 0.001) occur over a very narrow range of physiological osmolalities, which suggests that chondrocytes likely experience chromatin condensation and decondensation during a daily loading cycle. The effect of changes in osmolality on nuclear morphology (p < 0.01) and chromatin condensation (p < 0.001) also differed between chondrocytes in monolayer culture and three-dimensional agarose, suggesting a role for cell adhesion. The relationship between condensation and osmolality was accurately modeled by a polymer gel model which, along with the rapid nature of the chromatin condensation (<20 s), reveals the basic physicochemical nature of the process. Alterations in chromatin structure are expected to influence gene expression and thereby regulate chondrocyte activity in response to osmotic changes.