An efficient treatment for osteoarthritis (OA) can benefit from the local release of a high therapeutic dose over an extended period of time. Such a treatment will minimize systemic side effects and avoid the inconvenience of frequent injections. To this aim, nanocrystal–polymer particles (NPPs) are developed by combining the advantages of nanotechnology and microparticles. Nanocrystals are produced by wet milling kartogenin (KGN), which is known to promote chondrogenesis and to foster chondroprotection. A fluorescent biodegradable polymer is synthesized for intravital particle tracking. Polymer microparticles with 320 nm embedded KGN nanocrystals (KGN-NPPs) show a high drug loading of 31.5% (w/w) and an extended drug release of 62% over 3 months. In vitro, these particles do not alter mitochondrial activity in cultured human OA synoviocytes. In vivo, KGN-NPPs demonstrate higher bioactivity than a KGN solution in a murine mechanistic OA model based on histological assessment (Osteoarthritis Research Society International score), epiphyseal thickness (microcomputed tomography), OA biomarkers (e.g., vascular endothelial growth factor, Adamts5), and prolonged intra-articular persistence (fluorescence analysis). This work provides proof-of-concept of a novel and innovative extended drug delivery system with the potential to treat human OA.