Human mesenchymal stem cells are Currently being studied extensively because of their capability for self-renewal and differentiation to various connective tissues, which makes them attractive its cell Sources for regenerative medicine. Herein we report the isolation of human placenta-derived mesenchymal cells (hPDMCs) that have the potential to differentiate into various lineages to explore the possibility of using these cells for regeneration of cartilage. We first evaluated the chondrogenesis of hPDMCs in vitro and then embedded the hPDMCs into an atelocollagen gel to make a cartilage-like tissue with chondrogenic induction media. For in vivo assay, preinduced hPDMCs embedded in collagen sponges were subcutaneously implanted into nude mice and also into nude rats with osteochondral defect. The results of these in vivo and in vitro studies suggested that hPDMCs can be one of the possible allogeneic cell sources for tissue engineering of cartilage. (c) 2005 Elsevier Inc. All rights reserved.