One of the major problems in autologous chondrocyte transplantation for cartilage defect repair is the acquisition of a sufficient number of chondrocytes. Chondrocytes lose their cartilaginous phenotype during expansion in monolayer culture. Bone marrow mesenchymal stem cells (MSCs) have the ability to differentiate into chondrocytes under appropriate conditions. In order to explore the feasibility of applying these cells simultaneously for cartilage tissue engineering, human MSC and bovine mature articular chondrocytes (BCH) were mixed and cocultured. Mixed pellet culture showed upregulation of cell proliferation, cartilaginous extracellular matrix production and type II collagen gene expression. MSCs mediated a paracrine effect on BCH through growth factor secretion or cell-to-cell interaction, upregulating the cartilaginous phenotype of BCH.