With the present study the aim was to assess the efficacy of synthetic matrix as specific drug carriers carrying encapsulation of cells for the differentiation using mesenchymal stem cells (MSCs). The poly(N-isopropylacrylamide-co-vinylimidazole); p(NiPAAm-co-VI)) matrix itself, synthetic matrix, without drugs was used as the control in order to determine the effects of these materials on differentiation. MSCs obtained from rabbit bone marrow were tested as a potential cell source for tissue regeneration encapsulated in synthetic matrix, in the presence or absence of the growth factor (TGF-beta 1) and dexamethasone (Dex). The encapsulated with cells and synthetic matrix were transplanted into a nude mouse as an injected form and cultured for up to 8 weeks. The specific gene expression was determined by RT-PCR analysis. The amount of cartilage-associated ECM proteins was examined by Safranin-O staining. These data indicate the potential use of TGF-beta 1 and Dex for reconstruction of neocartilage formation. We have concluded that synthetic matrix including TGF-beta 1 and Dex has useful carrier as containing inducers of chondrogenic differentiation materials in the regeneration of tissue-engineered cartilage in vivo. (C) 2009, The Society for Biotechnology, Japan. All rights reserved.