Increasing consumption of fat-free or low-fat milk was found to slow progression of the degenerative condition, which wears away the joints.
Women who drank more than seven eight ounce glasses a week had significantly less space between their joints than those who drank none after four years.
Those who drank no milk had an average width space of 0.38mm millimetres, compared with 0.26mm for high consumers.
No association was seen between milk consumption drinking milk and reduced joint space width in men. The trend was maintained after adjusting for disease severity, body mass index (BMI), and diet.
"Milk consumption plays an important role in bone health," said lead scientist Dr Bing Lu, from Brigham and Women's Hospital in Boston, US. "Our study is the largest study to investigate the impact of dairy intake in the progression of knee OA.
"Our findings indicate women who frequently drink milk may reduce the progression of OA. "
The findings are reported in the journal Arthritis Care & Research.
A total of 2148 men and women with knee OA were recruited for the Osteoarthritis Initiative study.
In the journal, US experts Dr Shivani Sahni and Robert McLean, from the Hebrew SeniorLife Institute for Aging Research wrote: "The study provides the first evidence increasing fat-free or low-fat milk consumption may slow the progression of OA among women who are particularly burdened by OA of the knee."