We investigated whether betulin affects the gene expression, secretion and proteolytic activity of matrix metalloproteinase-3 (MMP-3) in primary cultured rabbit articular chondrocytes, as well as in vivo production of MMP-3 in the rat knee joint to evaluate the potential chondroprotective effect of betulin. Rabbit articular chondrocytes were cultured and reverse transcription-polymerase chain reaction (RT-PCR) was used to measure interleukin-1β (IL-1β)-induced gene expression of MMP-3, MMP-1, MMP-13, a disintegrin and metalloproteinase with thrombospondin motifs-4 (ADAMTS-4), ADAMTS-5 and type II collagen. Effect of betulin on IL-1β-induced secretion and proteolytic activity of MMP-3 was investigated using western blot analysis and casein zymography, respectively. Effect of betulin on MMP-3 protein production was also examined in vivo. The results were as follows: (1) betulin inhibited the gene expression of MMP-3, MMP-1, MMP-13, ADAMTS-4, and ADAMTS-5, but increased the gene expression of type II collagen; (2) betulin inhibited the secretion and proteolytic activity of MMP-3; (3) betulin suppressed the production of MMP-3 protein in vivo. These results suggest that betulin can regulate the gene expression, secretion, and proteolytic activity of MMP-3, by directly acting on articular chondrocytes.