Osteoarthritis (OA) is a condition found worldwide, is strongly associated with aging and is the most common type of arthritis. Because of its effect on ambulation and mobility, it has significant functional impact and is associated with considerable medical costs. Because of the aging of the society and the obesity epidemic, the burden of OA can be expected to increase over the next 20 years. Although OA has been regarded primarily as a non-inflammatory arthropathy, symptoms of local inflammation and synovitis are present in many patients and have been observed and even in the absence of classical inflammation, which is characterized by infiltration of neutrophils and macrophages into joint tissue, elevated levels of inflammatory cytokines have been measured in OA synovial fluid. Although the cartilage lesion is present at sites remote from synovium, the fibroblast- and macrophage-like synovial cells, as well as the chondrocytes itself, are potential sources of cytokines that could induce chondrocytes to synthesize and secrete cartilage-degrading proteases, cytokines, and other inflammatory mediators. The bio-identical progesterone shows its anti-inflammatory effects in OA by suppressing gene expressions in the production of inflammatory cytokines through the negative interaction between nuclear transcription factor and the progesterone receptor and/or the progesterone-induced increase of nuclear transcription factor inhibition in the nucleus. The bio-identical progesterone may indirectly regulate bone remodeling and may also play a role in the development and maintenance of cartilage. This review will discuss about transdermal bio-identical progesterone cream as suggested hormonal treatment of OA, based on its pathogenic process.