(1) Interest in the Juncaceae family has risen as some members have shown anti-inflammatory properties and interesting compounds. In this regard, we decided to investigate the antioxidant and anti-inflammatory properties of Luzula sylvatica, a Juncaceae not yet extensively studied, in the context of osteoarthritis. (2) The Luzula sylvatica Ethanol extract (LS-E) was used to test the production of reactive oxygen species (ROS) by leucocytes, the IL1β and PGE2 production by peripheral blood mononuclear cells (PBMCs), the production of EP4, and the activation of NFκB in THP-1, as well as the IL1β-activated normal human knee articular chondrocytes (NHAC-Kn) gene expression, grown in monolayers or maintained in alginate beads. (3) Organic acids, caffeoylquinic acids, quercetin and luteolin, compounds frequently found in this family were identified. The LS-E exhibited inhibited ROS formation. The LS-E did not affect NFκB activation and IL1β secretion but dampened the secretion of PGE2 by PBMCs and the presence of EP4 in THP-1. It also modulated the expression of NHAC-Kn in both models and inhibited the expression of several proteases and inflammatory mediators. (4) Luzula sylvatica might supply interesting antioxidant protection against cartilage damages and lessen joint inflammation, notably by decreasing PGE2 secretion in the synovial fluid. Moreover, it could act directly on chondrocytes by decreasing the expression of proteases and, thus, preventing the degradation of the extracellular matrix.