Osteoarthritis of the knee is one of the most common causes of disability among elderly. As the disease progresses the cartilage become frustrated, surrounding bone react to become thicker and inflammation occurs in subchondral bone seen in T2-weighted MRI as increase in signal density. Patients are treated initially by pain management. In patients who don't response to first line treatment invasive treatment like total knee replacement is done. The investigators designed this clinical study with the aim of evaluating therapeutic effects of intra-articular injection of bone marrow mesenchymal stem cells (BM-MSCs) in patients with severe knee osteoarthritis.

This is single center, randomized, triple blind phase II clinical study. Patients will be divided into two groups of case and control. All subjects will undergo bone marrow aspiration. Mesenchymal stem cells will be isolated from bone marrow, cultured and transplanted back to the knee joint. Patients of case group will receive cell injection 1 and 4 months after bone marrow aspiration. Placebo will be administered in this group 6 months after the first injection. Patients of control group will receive placebo 1 and 4 months after bone marrow aspiration. They all receive cell injection 6 months after first placebo injection. Follow up visit will occur at 2 and 6 weeks, and 3 and 6 months after the first injection. Radiological exams will be performed before and 6 months after the first injection by MRI. Clinical quantitative assessment will measure joint function by the WOMAC index and pain by the visual analogue scale.

Inclusion Criteria:

• Osteoarthritis diagnosed by MRI

Exclusion Criteria:

• Pregnancy or lactating
• Positive tests for HIV, HCV, HBV
• Active neurologic disorder
• End organ damage
• Uncontrolled endocrine disorder