The purpose of this study was to investigate the role of fear of falling (FoF) and psychological symptoms in explaining the relationship between osteoarthritis (OA) symptom severity and falls. Individuals aged ≥65 years with ≥2 falls or ≥1 injurious fall over the past 12 months were included in the falls group, while volunteers aged ≥65 years with no history of falls over 12 months were recruited as controls. The presence of lower extremity OA was determined radiologically and clinically. Severity of symptoms was assessed using the Western Ontario and McMaster Universities Arthritis Index (WOMAC) questionnaire. FoF and psychological status were measured with the shortened version of the Falls Efficacy Scale-International and the 21-item Depression, Anxiety and Stress Scale (DASS-21), respectively. Of 389 (229 fallers, 160 non-fallers) potential participants, mean (SD) age: 73.74 (6.60) years, 141 had clinical OA and 171 had radiological OA. Fallers with both radiological OA and clinical OA had significantly higher FoF and DASS-21 scores than non-fallers. FoF was significantly positively correlated with symptom severity in fallers and non-fallers with radiological and clinical OA. Depression, anxiety, and stress scores were only significantly correlated with symptom severity among fallers but not non-fallers in both clinical and radiological OA. The relationship between mild symptoms and reduced risk of falls compared to no symptoms in those with radiological OA was attenuated by increased anxiety. The increased falls risk associated with severe symptoms compared to mild symptoms in clinical OA was attenuated by FoF. FoF may, therefore, be a potentially modifiable risk factor for OA-associated falls which could be considered in future intervention studies.