Osteoarthritis is a prevalent joint disease and a major cause of disability worldwide with no curative therapy. Development of disease-modifying therapies requires a better understanding of the molecular mechanisms underpinning disease. A hallmark of osteoarthritis is cartilage degradation. To define molecular events characterising osteoarthritis at the whole transcriptome level, we performed deep RNA sequencing in paired samples of low- and high-osteoarthritis grade knee cartilage derived from 124 patients undergoing total joint replacement. We detected differential expression between low- and high-osteoarthritis grade articular cartilage for 365 genes and identified a 38-gene signature in osteoarthritis cartilage by replicating our findings in an independent dataset. We also found differential expression for 25 novel long non-coding RNA genes (lncRNAs) and identified potential lncRNA interactions with RNA-binding proteins in osteoarthritis. We assessed alterations in the relative usage of individual gene transcripts and identified differential transcript usage for 82 genes, including ABI3BP, coding for an extracellular matrix protein, AKT1S1, a negative regulator of the mTOR pathway, and TPRM4, coding for a transient receptor potential channel. We further assessed genome-wide differential splicing, for the first time in osteoarthritis, and detected differential splicing for 209 genes, which were enriched for extracellular matrix, proteoglycans and integrin surface interactions terms. In the largest study of its kind in osteoarthritis, we find that isoform and splicing changes, in addition to extensive differences in both coding and non-coding sequence expression, are associated with disease and demonstrate a novel layer of genomic complexity to osteoarthritis pathogenesis.