Purpose: Osteoarthritis (OA) is a degenerative joint disease with increasing prevalence and no approved disease modifying drugs. Synovium is critical to maintain the health of joint tissues including cartilage, but becomes inflamed in OA. Macrophages increase in number and activity in OA synovium, but their roles in OA also remain elusive. We aimed to investigate the interaction between synovium and chondrocytes and determine whether synovial macrophages mediate this interaction. Here, we test the effects of macrophage manipulation on cartilage outcomes, including depletion and modulation of synovial macrophage activation in a post-traumatic rat model of knee osteoarthritis (PTOA). Methods: PTOA was induced by anterior crucial ligament transection and medial meniscal tibial ligament transection (ACLT-DMM) in Sprague Dawley rats (n=4 per condition). Selective targeting of synovial macrophages was achieved using intra-articular injection of liposomes containing clodronate (18.2 mM encapsulated) for macrophage depletion, fludarabine (2.5 mg/mL encapsulated) STAT1 inhibitor to block M1 polarization, or AS1517499 (1 mg/mL encapsulated) STAT6 inhibitor to block M2 polarization, vs. PBS liposomes (control). Rat knees were injected at week 2 and 3 post-PTOA induction prior to tissue harvest at 4 weeks (early PTOA endpoint). The effects of synovial macrophage modulation on adult articular chondrocytes were tested in a novel trans-well co-culture system. Sulphated glycosaminoglycan (sGAG) secretion (colorimetric assay) and chondrocyte gene expression (qPCR) were analyzed. Joint histopathology scoring was performed for cartilage damage (toluidine blue) and synovial features (haematoxylin and eosin). Results: Liposomal macrophage depletion and STAT6 inhibitor treatments both reduced synovial lining cells, subsynovial infiltration, and surface fibrin deposition, but increased synovial vascularization scores in PTOA synovium vs controls. In contrast, liposomal STAT1 inhibitor treatment suppressed subsynovial infiltration but did not reduce synovial lining cells or fibrin deposition. No treatment modified cartilage degradation scores, which are typically mild at this early stage of PTOA. In co-culture experiments, Col2a1 expression was markedly suppressed in articular chondrocytes co-cultured with PTOA synovium that had been treated with liposomal clodronate (macrophage depletion) or STAT6 inhibitor. Liposomal STAT6 inhibitor-treated synovium also increased chondrocyte expression of Acan, Mmp3, and Ccl2 and significantly increased sGAG release. In contrast, liposomal STAT1 inhibition in PTOA synovium robustly increased expression of Acan, Col2a1, Prg4, Adamts5, and Mmp13 and significantly increased sGAG release in co-cultured articular chondrocytes. Conclusions: Liposomal packaging of drugs allows for selective targeting to phagocytes. This work demonstrates that communication between synovium and chondrocytes is dynamic and can be differentially controlled through selective modulation of synovial macrophages. We also show that macrophage-specific treatment induces changes in synovial histopathology in early stages of experimental PTOA. Overall, macrophage depletion or STAT6 inhibition reduces chondrocyte anabolic gene expression, while STAT1 inhibition in macrophages results in marked increases in chondrocyte anabolic gene expression, including the key synovial joint lubricating molecule lubricin (Prg4), and release of key matrix component sGAGs. This anabolic response coupled with the increased expression of catabolic genes, Mmp13 and Adamts5, suggests induction of a matrix remodelling response in chondrocytes. Understanding the influence of macrophages on other joint tissues such as cartilage is important to understand potential disease-modifying therapeutic targets.