Objective: To identify predictors of pain and disability in knee osteoarthritis. Design: A one-year prospective analysis of determinants of pain and functioning in knee osteoarthritis. Study setting: Primary care providers in a medium-sized city. Patients: A total of 111 patients aged from 35 to 75 with clinical symptoms and radiographic grading (Kellgren-Lawrence 2–4) of knee osteoarthritis who participated in a randomized controlled trial. Main measures: The outcome measures were self-reported pain and function, which were recorded at 0, 3 and 12 months. Disease-specific pain and functioning were assessed using the pain and function subscales of the Western Ontario and McMaster Universities (WOMAC) Osteoarthritis Index. Generic physical and mental functioning were assessed using the RAND-36 subscales for function, and physical and mental component summary scores. Possible baseline predictors for these outcomes were 1) demographic, socioeconomic and disease-related variables, and 2) psychological measures of resources, distress, fear of movement and catastrophizing. Results: Multivariate linear mixed model analyses revealed that normal mood at baseline measured with the Beck Anxiety Inventory predicted significantly better results in all measures of pain (WOMAC P=0.02) and function (WOMAC P=0.002, RAND-36 P=0.002) during the one-year follow-up. Psychological resource factors (pain self-efficacy P=0.012, satisfaction with life P=0.002) predicted better function (RAND-36). Pain catastrophizing predicted higher WOMAC pain levels (P=0.013), whereas fear of movement (kinesiophobia) predicted poorer functioning (WOMAC P=0.046, RAND-36 P=0.024). Conclusions: Multiple psychological factors in people with knee osteoarthritis pain are associated with the development of disability and longer term worse pain.