Background and Purpose: Corticosteroids are intra-articularly injected to relieve pain in joints with osteoarthritis (OA) or acute tissue damage such as ligament or tendon tears, despite its unverified contraindication in unstable joints. Biomaterial-based sustained delivery may prolong reduction of inflammatory pain, while avoiding harmful peak drug concentrations. Experimental Approach: The applicability of prolonged corticosteroid exposure was examined in a rat model of anterior cruciate ligament and medial meniscus transection (ACLT + pMMx) with ensuing degenerative changes. Key Results: Intra-articular injection of a bolus of the corticosteroid triamcinolone acetonide (TAA) resulted in enhanced joint instability in 50% of the joints, but neither instability-induced OA cartilage degeneration, synovitis, nor the OA-related bone phenotype was affected. However, biomaterial microsphere-based extended TAA release enhanced instability in 94% of the animals and induced dystrophic calcification and exacerbation of cartilage degeneration. In healthy joints, injection with TAA releasing microspheres had no effect at all. In vitro, TAA inhibited cell migration out of joint tissue explants, suggesting inhibited tissue healing in vivo as mechanisms for enhanced instability and subsequent cartilage degeneration. Conclusions and Implications: We conclude that short-term TAA exposure has minor effects on surgically induced unstable joints, but its extended presence is detrimental by extending instability and associated joint degeneration through compromised healing. This supports a contraindication of prolonged corticosteroid exposure in tissue damage-associated joint instability, but not of brief exposure.