ABSTRACT: Background: Degenerative knee osteoarthritis (KOA) may lead to disability in adults. Current treatment modalities for KOA often involve significant side effects and high costs. Yi-Ping Lin Circum-knee Acupuncture (CKA-L) emerged as a cost-effective and nearly side-effect-free alternative. However, its efficacy and the underlying mechanisms remain unclear, which raised our concern. Methods: Female SD rats were randomly divided into 4 groups: Sham, Model, CKA-L treatment (Treatment), and positive control (Piroxicam). The Arthritis Index (AI) and body weights were recorded. ELISA was used to quantify levels of IL-1β and TNF-α. X-ray, HE, and Toluidine blue staining were employed to assess cartilage regeneration. Transcriptome sequencing was performed on Sham, Model, and Treatment groups. Functional enrichment analysis alongside PPI. RT-qPCR and western blot were utilized to determine the hub genes. Results: Both CKA-L and piroxicam effectively alleviated KOA, albeit with slower response times for CKA-L. ELISA results demonstrated significant reductions in pro-inflammatory cytokines, with a pronounced decline in TNF-α in the Treatment group. CKA-L markedly increased chondrocyte populations and narrowed the knee joint gap. Transcriptome analysis identified 3,363 DEGs. Functional enrichment analyses highlighted significant associations with DNA repair, inhibition of cysteine-type endopeptidases, and cell-cycle regulation. The PPI analysis of DEGs designated five hub genes: Bgn, Ctsb, Lum, Serpine1, and Tnfaip6, which demonstrated consistent transcriptional and translational expression levels. Conclusion: CKA-L promotes chondrocyte proliferation and provides effective treatment for KOA, with the advantages of low price, low side effects, and convenient operation.