Knee osteoarthritis (OA) is one of the most prevalent disorders in elderly population. Among various therapeutic alternatives, we employed stromal vascular fraction (SVF), a heterogeneous cell population, to regenerate damaged knee cartilage. OA patients were classified on the basis of age, gender, body mass index (BMI), and x-ray-derived Kellgren–Lawrence (KL) grade. They were treated with SVF and followed-up for 24 months. Visual analogue scale (VAS) and Western Ontario and McMaster Universities Osteoarthritis (WOMAC) Index were used to determine treatment efficacy. Cartilage healing was assessed using the MRI-based Outerbridge score (OS) and evaluation of bone marrow edema (BME) lesions, while a placebo group was used as a control. Time- and KL-dependent changes were also monitored. We observed a decreasing trend in VAS score and WOMAC index in the SVF-treated group up to 24 months, as compared with the placebo group. Besides, a significant increase and decrease in Lysholm and OS, respectively, were observed in the treatment group. Compared with the values before treatment, the greatly reduced WOMAC scores of KL3 than KL2 groups at 24 months, indicate more improvement in the KL3 group. Highly decreased BME in the treated group was also noted. In conclusion, the SVF therapy is effective in the recovery of OA patients of KL3 grade in 24 months.