In osteoarthritic chondrocytes, dysregulation of mitochondrial dynamics due to excessive intracellular reactive oxygen species (ROS) under inflammatory conditions is a significant contributory factor to poor treatment outcomes, because it leads to a reduced cell response to chondrogenic drugs during this state. The aim of this study was to develop a multifunctional Au@CeO2 yolk-shell nanozyme (YSN) as a novel therapeutic nanomaterial and drug delivery system. Under photothermal conditions, Au@CeO2 nanozymes neutralized excessive ROS, enhanced antioxidant capacity, and maintained mitochondrial homeostasis of osteoarthritic chondrocytes, thereby restoring cellular responsiveness to external stimuli. Furthermore, bioactive peptide CK2.1 loaded in YSNs (Au@CeO2-CK2.1) achieved ordered release under photothermal conditions, effectively promoting chondrocyte anabolic activity. In a mice osteoarthritis (OA) model, local Au@CeO2-CK2.1 photothermal therapy effectively enhanced cartilage repair and regeneration in vivo. Mechanically, our research uncovers that decreased chondrogenic drug response is associated with activation of extracellular regulated kinase-1 and -2 (ERK1/2) pathway, and Au@CeO2-CK2.1 YSNs regulates mitochondrial dynamics through inhibiting ERK1/2 and dynamin-1-like protein (DRP1) phosphorylation. The results of this study demonstrated an effective therapeutic strategy that rescued chondrogenic drug response in osteoarthritic chondrocytes, achieving anti-inflammation and cartilage regeneration.