Abstract Introduction Osteoarthritis (OA) is the most common joint disorder worldwide characterized by progressive loss of articular cartilage. This study was conducted to evaluate the role of bone marrow mesenchymal stem cells (BMSCs) derived Exosomes as a promising therapy for treating osteoarthritis. Aim of the Work to study the healing potential of BMSCs derived exosomes on experimentally induced knee osteoarthritis. Materials and Methods Forty adult male albino rats, weighing 200-250 gm, were used in this study, five rats used as a source of BM-MSCs derived exosomes. The other thirty-five rats were randomly divided into three main groups Group I: The control group (20 rats) in which rats were subdivided into four subgroups. Subgroups IA and IB were sacrificed 2 and 6 weeks after the beginning of the experiment. Subgroup IC left for 2 weeks then were received intra-articular injection of 0.1ml Phosphate buffer saline (PBS) in right knee joint once weekly for 4 weeks Subgroup ID: left for 2 weeks then given intra-articular injection of purified exosome concentrate in the right knee joint once weekly for 4 weeks then the animals were sacrificed Group II:(15 rats) in which OA was induced by intra-articular injection of 2% formaldehyde solution in the right knee joints. The rats of group II were subdivided into two subgroups. Subgroups IIA and IIB were sacrificed 2 and 6 weeks after induction of OA respectively. Group III (5 rats), Osteoarthritis induced, as in group II and animals left for 2 weeks then treated by intra-articular injection of purified exosome concentrate in right knee joint once weekly for 4 weeks. The right joints from all groups were collected, decalcified and processed for histological studies. Morphometric and statistical measurements were done. Results Histological examination of the right knee joints of OA group (subgroups IIA and IIB) showed surface erosions, decrease cartilage thickness, chondrocytes with pyknotic nuclei and areas of chondrocytes loss with longitudinal clefts reaching the deep zone. Synovial membrane of group II showed increased thickness of the intima, mononuclear cellular infiltration with abundant collagen fibres deposition and dilated congested blood vessels in subintima, apparent increase in the number of iNOS positive intimal synovial cells. Meanwhile, group III showed smooth articular surface, with multiple colonies of chondrocytes and multiple cell nests, significant increase in the mean area percentage of PCNA positive chondrocytes in animals of group Ш when compared to all the other groups. Conclusion BMSCs derived exosomes improved OA induced damage of articular cartilage and synovial membrane. Therefore, it offers a cell-free treatment of OA and joint damage.