Patients with knee osteoarthritis (KOA) often suffer from cognitive decline and increased dementia risk, but the neurobiological mechanisms remain unclear. In this study, we evaluated cognitive performance and collected brain magnetic resonance imaging (MRI) data and blood samples from cognitively normal KOA patients at baseline sessions and reevaluated their cognition after 5 years. We also collected MRI data from matched healthy controls. Results showed that KOA patients exhibited dysregulated functional connectivities between the hippocampus and thalamus/superior frontal gyrus compared with healthy controls. The altered hippocampal functional connectivities were associated with serum brain-derived neurotrophic factor (BDNF) levels and spatial expression of genes enriched in synaptic plasticity. The hippocampus-thalamus functional connectivity was significantly correlated with patients' memory scores. Moreover, the baseline hippocampus-thalamus functional connectivity and BDNF levels significantly predicted the development of cognitive decline in KOA patients in the follow-up session. Our findings provide insight into the neurobiological underpinnings of KOA and cognitive decline.