Introduction: Osteoarthritis (OA) is characterized by an imbalance in cartilage and underlying subchondral bone homeostasis. We hypothesized that signals from the subchondral bone may modulate production of matrix components, alter chondrogenic differentiation potential of cocultured bone marrow-derived mesenchymal stem cells (BMSC) and induce a phenotypic shift in differentiated OA chondrocytes. Methods: We established a novel coculture model between BMSC, mixed cultures (BMSC and chondrocytes) and chondrocytes embedded in fibrin gel with OA and normal subchondral bone explants (OAB and NB). Tissues and cells were either derived from OA or trauma patients. In addition, we used adipose-derived stem cells (ASC) from liposuction. With gene expression analysis, biochemical assays, immunofluorescence and biomechanical tests we characterized the properties of newly generated extracellular matrix (ECM) from chondrocytes and chondrogenically differentiating BMSC cocultured with OAB or NB in comparison with monocultures (cultures without bone explants). Results: Overall, gene expression of collagens of OAB and NB cocultured cells was reduced compared to monocultures. Concomitantly, we observed significantly lower collagen I, II and III and glycosaminoglycan (GAG) production in OAB cocultured cell lysates. In parallel, we detected increased concentrations of soluble GAGs and basic fibroblast growth factor (bFGF), interleukin (IL)-6 and IL-8 in supernatants of OAB and NB cocultures mainly at early time points. IL-1 beta concentration was increased in supernatants of OAB cocultures, but not in NB cocultures. Cell-free NB or OAB explants released different amounts of IL-1 beta, bFGF and soluble GAG into cell culture supernatants. In comparison to cocultures, monocultures exhibited higher Young's modulus and equilibrium modulus. Stimulation of monocultures with IL-1 beta led to a downregulation of aggrecan (ACAN) gene expression and in general to induced matrix metalloprotease (MMP) 2, MMP3 and MMP-13 gene expression while IL-6 and IL-8 stimulation partly reduced ACAN, MMP3 and MMP-13 gene expression. Conclusions: Our results suggest an alteration of molecular composition and mechanical properties of the newly formed ECM in subchondral bone cocultures. We suggest that soluble factors, that is interleukins and bFGF, released in cocultures exert inhibitory effects on collagen and temporary effects on proteoglycan production, which finally results in a reduction of mechanical strength of newly formed fibrillar networks.