The treatment of OA using pharmaceutical and non-pharmaceutical measures remains a topical subject. The purpose of this study is to assess the effect of natural factors (mineral water and mud) on changes in the functional state of patients with knee joint OA. Ninety-two adult people with grade I–III knee joint OA according to the Kellgren and Lawrence scoring system participated in the study. The subjects received 10 mineral water bath plus physical therapy or mud application procedures plus physical therapy or physical therapy alone every other day. The effectiveness of the treatment was assessed on the basis of anthropometric changes of data, VAS, SF-36, KOOS questionnaire indicators. Significantly greater walking speed, test of 5 sit downs/stand ups, circumference of a knee joint, flexion and extension range, flexor and extensor strength after treatment lasting 1 month were obtained in the intervention group. After 1 month after treatment pain intensity scores over the past month and when changing position were significantly higher in the control group. The positive changes in SF-36 were identified after 1 month after treatment: physical activity increased and pain decreased in the intervention groups. There was no significant difference between the averages of any KOOS subscale in groups. However, average percentages of symptoms, stiffness, and pain in the intervention groups were significantly better after treatment and lasting 1 month after treatment. Balneotherapy and peloid therapy effectively reduce pain and improve the functional state of patients with OA of a knee joint.