Objective: We introduced a stepped-care strategy (SCS) for hip and knee osteoarthritis, focusing on delivery of high-quality stepped care. In this study, we aimed to identify factors associated with various steps of the SCS. Methods: We used data from a 2-year observational prospective cohort study, including 313 patients visiting their general practitioner (GP) with a new episode of hip/knee osteoarthritis. We used logistic multilevel analyses to identify factors at the level of the patient, the GP, and the general practice, related to treatment limited to primary care, referral to nonsurgical secondary care, or surgical procedures. Results: Patients whose treatment had been limited to primary care tended to function physically better (odds ratio [OR] 1.03). Furthermore, they less often received exercise therapy (OR 0.46), intraarticular injections (OR 0.08), and radiologic assessments (OR 0.06). Continuation of nonsurgical care after referral was more likely in employed patients (OR 2.90) and patients who had no exercise therapy (OR 0.19) or nonsteroidal antiinflammatory drugs (OR 0.35). Surgically treated patients more often received exercise therapy (OR 7.42). Referral and surgical treatment depended only to a limited extent on the GP or the general practice. Conclusion: After implementation of the SCS in primary care, the performance of exercise therapy, rather than disease severity or psychologic factors, seems to play a key role in the decision whether or not to refer for surgical or nonsurgical treatment in secondary care. To optimize patient-tailored treatment, future research should be adressed to determine the optimal moment of switching from primary to secondary care in patients with hip/knee osteoarthritis.