This study examined the acute effects of underwater and land treadmill exercise on oxygen consumption (VO2), perceived pain, and mobility. Nineteen participants diagnosed with osteoarthritis performed three consecutive exercise sessions for each mode of exercise. VO2 and perceived pain were recorded during each exercise session and Timed Up & Go (TUG) scores were measured before and after each intervention. VO2 values were not different between conditions during moderate intensities, but were 37% greater during low intensity exercise on land than in water (p = 0.001). Perceived pain and TUG scores were 140% and 240% greater, respectively, for land than underwater treadmill exercise (p = 0.01). Patients diagnosed with OA may walk on an underwater treadmill at a moderate intensity with less pain and equivalent energy expenditures compared to walking on a land based treadmill. Unexpectedly, OA patients displayed greater mobility and balance after underwater than land treadmill exercise when assessed with the TUG.