Osteoarthritis (OA) affects multiple tissues in the knee joint, including the synovium and intra-articular adipose tissue (IAAT) that are attached to each other. However, whether these two tissues share the same progenitor cells and hence function as a single unit in joint homeostasis and diseases is largely unknown. Single-cell transcriptomic profiling of synovium and infrapatellar fat pad (IFP), the largest IAAT, from control and OA mice revealed five mesenchymal clusters and predicted mesenchymal progenitor cells (MPCs) as the common progenitors for other cells: synovial lining fibroblasts (SLFs), myofibroblasts (MFs), and preadipocytes 1 and 2. Histologic examination of joints in reporter mice having Dpp4-CreER and Prg4-CreER that label MPCs and SLFs, respectively, demonstrated that Dpp4+ MPCs reside in the synovial sublining layer and give rise to Prg4+ SLFs and Perilipin+ adipocytes during growth and OA progression. After OA injury, both MPCs and SLFs gave rise to MFs, which remained in the thickened synovium at later stages of OA. In culture, Dpp4+ MPCs possessed mesenchymal progenitor properties, such as proliferation and multilineage differentiation. In contrast, Prg4+ SLFs did not contribute to adipocytes in IFP and Prg4+ cells barely grew in vitro. Taken together, we demonstrate that the synovium and joint fat pad are one integrated functional tissue sharing common mesenchymal progenitors and undergoing coordinated changes during OA progression.