Objective: Osteoarthritis (OA) is a chronic joint disease, with limited treatment options, characterized by inflammation and matrix degradation, and resulting in severe pain or disability. Progressive inflammatory interaction among key cell types, including chondrocytes and macrophages, leads to a cascade of intra- and inter-cellular events which culminate in OA induction. In order to investigate these interactions, we developed a multi-cellular Methods: We compared macrophages, chondrocytes and their co-culture responses to "low" Interleukin-1 (IL-1) or "high" IL-1/tumor necrosis factor (IL-1/TNF) levels of inflammation. We also investigated response changes following the administration of dexamethasone (DEX) or mesenchymal stromal cell (MSC) treatment via a combination of gene expression and secretory changes, reflecting not only inflammation, but also chondrocyte function. Results: Inflamed chondrocytes presented an osteoarthritic-like phenotype characterized by high gene expression of pro-inflammatory cytokines and chemokines, up-regulation of ECM degrading proteases, and down-regulation of chondrogenic genes. Our results indicate that while MSC treatment attenuates macrophage inflammation directly, it does not reduce chondrocyte inflammatory responses, unless macrophages are present as well. DEX however, can directly attenuate chondrocyte inflammation. Conclusions: Our results highlight the importance of considering multi-cellular interactions when studying complex systems such as the articular joint. In addition, our approach, using a panel of both inflammatory and chondrocyte functional genes, provides a more comprehensive approach to investigate disease biomarkers, and responses to treatment.