Therapeutic gene transfer into articular cartilage is a potential means to stimulate reparative activities in tissue lesions. We previously demonstrated that direct application of recombinant adeno-associated virus (rAAV) vectors to articular chondrocytes in their native matrix in situ as well as sites of tissue damage allowed for efficient and sustained reporter gene expression. Here we test the hypothesis that rAAV-mediated overexpression of fibroblast growth factor 2 (FGF-2), one candidate for enhancing the repair of cartilage lesions, would lead to the production of a biologically active factor that would facilitate the healing of articular cartilage defects. In vitro, FGF-2 production from an rAAV-delivered transgene was sufficient to stimulate chondrocyte proliferation over a prolonged period of time. In vivo, application of the therapeutic vector significantly improved the overall repair, filling, architecture, and cell morphology of osteochondral defects in rabbit knee joints. Differences in matrix synthesis were also observed, although not to the point of statistical significance. This process may further benefit from cosupplementation with other factors. These results provide a basis for rAAV application to sites of articular cartilage damage to deliver agents that promote tissue repair.