Cardiovascular adverse effects of COX-2 inhibitors and gastro-intestinal intolerability of NSAIDs for the treatment of osteoarthritis has prompted for better tolerated and efficacious NSAID but as there is paucity of data in Indian population, the present study was taken up. To evaluate the efficacy and tolerability of lornoxicam and diclofenac in patients with osteoarthritis of knee. A 4week, randomized open label comparative study was conducted in Department of Orthopedics, Victoria Hospital, Bangalore, on outpatients with osteoarthritis of knee who met the inclusion and exclusion criteria. About 100 patients were involved and randomized into two groups of 50 each receiving lornoxicam 8mg BD (group L) and Diclofenac 50mg TID in other (group D). Efficacy was assessed by VAS scores (visual analog scale), WOMAC scale (Western Ontario and McMasters Individual Osteoarthritis Index) for pain and Likert scale for patients assessment to response for therapy and tolerability monitored by incidence of adverse events and any changes in laboratory parameters done on follow up visits. Both drugs were associated with sustained reduction in the scores of osteoarthritis symptoms and improved response to therapy compared with baseline with P<0.001**. However there was significantly greater reduction in symptoms score and better response to therapy with lornoxicam compared to diclofenac as measured by VAS, WOMAC index of osteoarthritis knee and Likert scale with P<0.001**. Most of the patients reported gastro-intestinal intolerability with no cardiovascular and renal adverse effects but there was significantly less adverse events with lornoxicam compared to diclofenac with P<0.001**. In the present study lornoxicam significantly relieves pain of osteoarthritis knee more than diclofenac with better patient’s response to therapy and tolerability.