OBJECTIVE To investigate the mechanism of Xibining Ⅱ formula in alleviating synovial inflammation and fibrosis in knee osteoarthritis （KOA） rats based on Janus kinase 2 （JAK2）/signal transducer and activator of transcription 3 （STAT3） pathway. METHODS Seventy-five male SD rats were randomly divided into sham operation group （Sham group）， KOA group， Xibining Ⅱ low-dose group （XBNⅡ-L group， 4 g/kg）， Xibining Ⅱ high-dose group （XBNⅡ-H group， 8 g/kg）， and Xibining Ⅱ high-dose combined with STAT3 activator Colivelin trifluoroacetate （C-TFA） group [C-TFA group， 8 g/kg Xibining Ⅱ+ 1.0 mg/（kg·d） C-TFA]， with 15 rats in each group. Except for the Sham group， the KOA model was established by anterior cruciate ligament transection in the other groups. After successful modeling， each group was given corresponding drugs by intragastric administration and （or） intraperitoneal injection once daily for 28 consecutive days. After the last medication， the pathological changes of synovial tissue of knee joint in each group were evaluated and the indicators were calculated. The levels of serum inflammatory factors were detected. The positive expressions of phosphorylated JAK2 （p-JAK2） and phosphorylated STAT3 （p-STAT3） in synovial tissue of the knee joint were detected. The expressions of JAK2/STAT3 pathway-related proteins and mRNAs in synovial tissue were detected. RESULTS Compared with the Sham group， the synovial lining cells in the KOA group showed significant proliferation and disordered arrangement； the Krenn score， fibrosis ratio， positive area percentage of p-JAK2 and p-STAT3， p-JAK2/JAK2 and p-STAT3/STAT3， protein expression of Collagen-Ⅰ and α -smooth muscle actin， the mRNA expression of JAK2， STAT3， Collagen-Ⅰ and α -smooth muscle actin， as well as serum levels of interleukin-1β and interleukin-18 were significantly increased （ P ＜0.05）. Compared with the KOA group， the above pathological changes were significantly improved in each dose group of Xibining Ⅱ formula， and all indicators were significantly decreased （ P ＜0.05）， with the XBNⅡ-H group showing better effects than the XBNⅡ-L group （ P ＜0.05）. Compared with the XBNⅡ-H group， the above pathological damages were aggravated in the C-TFA group， and all indicators were significantly worsened （ P ＜0.05）. CONCLUSIONS Xibining Ⅱ formula can alleviate synovial inflammation and fibrosis in KOA rats， and its mechanism may be related to inhibiting the activation of JAK2/STAT3 pathway.