BACKGROUND Osteoarthritis (OA) affects the health and wellbeing of the elderly. Shaoyao Gancao decoction (SGD) is used in traditional Chinese medicine (TCM) for the treatment of OA and has two active components, shaoyao (SY) and gancao (GC). This study aimed to undertake a network pharmacology analysis of the mechanism of the effects of SGD in OA. MATERIAL AND METHODS The active compounds and candidates of SGD were obtained from the Traditional Chinese Medicine (TCM) Databases@Taiwan, the Traditional Chinese Medicine Systems Pharmacology (TCMSP) database, the STITCH database, the ChEMBL database, and PubChem. The network pharmacology approach involved network construction, target prediction, and module analysis. Significant signaling pathways of the cluster networks for SGD and OA were identified using the Kyoto Encyclopedia of Genes and Genomes (KEGG) database. RESULTS Twenty-three bioactive compounds were identified, corresponding to 226 targets for SGD. Also, 187 genes were closely associated with OA, of which 161 overlapped with the targets of SGD and were considered to be therapeutically relevant. Functional enrichment analysis suggested that SGD exerted its pharmacological effects in OA by modulating multiple pathways, including cell cycle, cell apoptosis, drug metabolism, inflammation, and immune modulation. CONCLUSIONS A novel approach was developed to systematically identify the mechanisms of the TCM, SGD in OA using network pharmacology analysis.