We previously reported that PTH(1–34) inhibits the terminal differentiation of articular chondrocytes and, in turn, suppresses the progression of osteoarthritis (OA). However, this treatment requires an injection of PTH(1–34) once every 3days over the treatment period. In this study, we studied the effect of sustained administration of PTH(1–34) in a papain-induced OA rat model. We developed an effective controlled-release system for prolonging the treatment duration of an intra-articular injection for OA treatment in rats. The effects of released PTH(1–34) from PLGA(65:35)-encapsulated PTH(1–34) microspheres (PTH/PLGA) on papain-induced OA in rat knees were studied. Microsphere morphology was observed in vitro by scanning electron microscopy, and microsphere size was determined with a particle size analyzer. The PTH(1–34) encapsulation efficiency and release profile, as well as the toxicity of PTH/PLGA, were examined. The bioactivity of released PTH(1–34) was tested by examining cAMP levels in MC3T3E1 cells. In vivo, we evaluated the changes of localized GAG, Col II, and Col X in the articular cartilage of rat knees. Our results demonstrated that the surface of the PLGA microspheres was smooth, and the size of the microspheres was in the range of 51–127μm. PTH/PLGA microspheres sustainably released PTH(1–34) for 19days with a concentration range of 0.01–100nM that covered the expected concentration of 10nM at 37°C. The cAMP levels of MC3T3E1 cells were elevated in the response to released PTH(1–34) from PTH/PLGA microspheres, indicating that the released PTH(1–34) is bioactive. Most importantly, intra-articular treatment with either PTH(1–34) (0.1–100nM) 3days/injection or PTH/PLGA microspheres (15days/injection) for 5weeks revealed the similar effect on suppressing papain-induced OA changes (decreasing GAG and Col II and increasing Col X) in rat knee cartilage. The effect of PTH/PLGA microspheres on suppressing OA progression was similar to that of a once-every-three-day injection of PTH(1–34), indicating that both the sustained and intermittent action of PTH(1–34) effectively suppress OA progression. The developed PLGA microspheres with sustained release and long-term effect may be potent carriers for PTH(1–34) used to treat early OA.