Objective To investigate the role of bone morphogenetic protein 2 (BMP-2) combined with hypoxic microenvironment in chondrogenic phenotype differentiation of bone marrow mesenchymal stem cells (BMSCs) of rat in vitro. Methods BMSCs were harvested from 4-week-old female Sprague Dawley rats. BMSCs at passage 2 were divided into 4 groups according different culture conditions: normoxia control group (group A), normoxia and BMP-2 group (group B), hypoxia control group (3% oxygen, group C), and hypoxia and BMP-2 group (group D). Then the cellular morphology was observed under inverted phase contrast microscope. Alcian blue immunohistochemical staining was used to detect the glycosaminoglycans (GAG), Western blot to detect collagen type II and hypoxia-inducible factor 1α (HIF-1α), and RT-PCRto detect the expressions of chondrogenic related genes, osteogenic related genes, and hypoxia related genes. Results At 21 days after induction of BMP-2 and hypoxia (group D), BMSCs became round, cell density was significantly reduced, and lacuna-l ike cells were wrapped in cell matrix, while the changes were not observed in groups A, B, and C. Alcian blue staining in group D was significantly bluer than that in other groups, and staining became darker with induction time, and the cells were stained into pieces of deeply-stained blue at 21 days. Light staining was observed in the other groups at each time point. The expression level of collagen type II protein in group D was significantly higher than those in other groups (P lt; 0.05). HIF-1α protein expression levels of groups C and D were significantly higher than those of groups A and B (P lt; 0.05). The expressions of collagen II α1 (COL2 α1) and aggrecan mRNA (chondrogenic related genes) were highest in group D, while the expressions of COL1 α1, alkaline phosphatase, and runt-related transcri ption factor 2 mRNA (osteogenic related genes) were the highest in group B (P lt; 0.05). Compared with groups A and B, HIF-1α (hypoxic related genes) in groups C and D significantly increased (P lt; 0.05). Conclusion BMP-2 combined with hypoxia can induce differentiation of BMSCs into the chondrogenic phenotype, and inhibit osteoblast phenotype differentiation. HIF-1α is an important signaling molecule which is involved in the possible mechanism to promote chondrogenic differentiation process.