Sanbi Decoction (SBD) has demonstrated promising therapeutic potential in osteoarthritis (OA) treatment, yet its precise mechanisms remain unclear. This research combined computational and experimental approaches, including bioinformatics analysis, network pharmacology, molecular docking, molecular dynamics simulations, and laboratory validation, to investigate the mechanisms of action of SBD. A total of 114 active compounds and 113 intersecting targets were identified through TCMSP and multiple screening strategies. Gene Ontology (GO) and Kyoto Encyclopedia of Genes and Genomes (KEGG) enrichment analyses revealed that these targets are primarily involved in key signaling pathways, including the AGE-RAGE signaling pathway, IL-17 signaling pathway, and TNF signaling pathway. Among the active components, Shinflavanone, Gancaonin L, Xambioona, Phaseol, Gancaonin O, and Licoisoflavanone exhibited strong binding affinity and structural stability with core targets, as validated by molecular docking and molecular dynamics simulations. Experimental results confirmed that SBD alleviates oxidative stress, reduces inflammation, and protects cartilage by inhibiting the AGE-RAGE/JNK pathway. These findings highlight SBD’s potential as a promising therapeutic agent for OA treatment.