Mudpack therapy is an alternative mode of treatment for rheumatic diseases. It is based on the application of heated mudpacks to the entire body or to specific areas, such as joints. The aim of the current study was to evaluate the efficacy of treatment with mud compresses at patients’ homes for osteoarthritis of the knee. Fifty-eight patients with osteoarthritis of the knee were enrolled in a prospective, double-blinded, controlled study. Of these, 40 were treated with natural mineral-rich mud compresses and 18 were treated with mineral-depleted mud compresses. Mud compresses were applied five times each week for 3 weeks for a total of 15 treatments. Patients were assessed at baseline, at completion of the 3-week treatment period, and twice after the conclusion of the treatment period (after 1 month and after 3 months). In the group treated with natural mud compresses, a significant reduction in knee pain was observed at all assessments. Similarly, improvement in the Lequesne Index was seen at the end of therapy and a month after treatment. In the control group, given mineral-depleted mud compresses, no significant change in knee pain was seen at any assessment. Improvement in the Lequesne Index was seen 1 month and 3 months after completion of the therapy, but not at the end of therapy. Of the patients in the treatment group, 72% had an improvement of >20% in self-assessment of knee pain, compared with 33% in the control.