OBJECTIVE To study the feasibility of constructing tissue engineered cartilage by differentiated rabbit bone marrow mesenchymal stem cells(MSC) cultured in vitro and in vivo. METHODS The MSC were isolated from the nucleated cells fraction of autologous bone marrow by density gradient centrifuge, and then induced into chondrogenic differentiation by adding dexamethasone, transforming growth factor-beta 1 (TGF-beta 1) and ascorbic acid in vitro. After 3 weeks, some cells turned to round shape and secreted metachromatic matrix. The cartilaginoid grafts composed of chondrogenic MSC. Bovine type I collagen and human fibrin were cultured within the chondrogenic medium for 2 weeks in vitro or transplanted subcutaneously adjacent to the knee joint for 3 weeks in vivo. RESULTS The most cells in the grafts were degenerated and disappeared after cultured in vitro. But the residual cells were survival and secreted metachromatic staining proteoglycan with toluidine blue, which was characteristic cartilage matrix. The grafts developed into matured cartilage tissue assessed by histological examination after 3 weeks of transplantation in vivo. CONCLUSION MSC can be used as functional cells to constructing tissue engineered cartilage.