OBJECTIVE To evaluate a pulse sequence combining stimulated echo diffusion preparation with a 3D segmented spoiled gradient echo (SPGR) acquisition for diffusion tensor imaging (DTI) of knee cartilage in healthy and osteoarthritis (OA) populations for early diagnosis and characterization of OA. METHODS Diffusion-weighted images of 40 subjects (20 healthy, 20 OA) at baseline and 20 subjects (10 healthy, 10 OA) at one year were obtained. The subjects were classified according to Kellgren Lawrence (KL) and whole organ magnetic resonance imaging scoring (WORMS) method acquired at 3 T. Cartilage full thickness and laminar mean diffusivity (MD) and fractional anisotropy (FA) values were quantified. The reproducibility of MD and FA values was assessed in five healthy human subjects based on test-retest scans. RESULTS In general, the full thickness MD values were higher in subjects with knee OA compared to healthy controls in both the baseline and follow up cohort. Laminar analysis MD and FA results were significantly different (p<0.05) between the bone-articular and articular layer with the articular layer having higher MD and lower FA value compared to the bone layer. The global reproducibility error was 6.5% for MD and 11.6% for FA. CONCLUSIONS The diffusion-weighted stimulated echo-based sequence may be used as a valuable tool for early diagnosis and characterization of knee OA at 3 T in the future.