Human bone marrow-derived mesenchymal stem cells (MSCs) have been shown to differentiate into distinct mesenchymal tissues including bone and cartilage. The capacity of MSCs to replicate undifferentiated and to mature into cartilaginous tissues suggests these cells as an attractive cell source for cartilage tissue engineering. Here we show that the stimulation of human bone marrow-derived MSCs with recombinant bone morphogenetic protein-2 (BMP2) results in chondrogenic lineage development under serum-free conditions. Histological staining of proteoglycan with Alcian blue and immunohistochemical staining of cartilage-specific type II collagen revealed the deposition of typical cartilage extracellular matrix components. Semi-quantitative real-time gene expression analysis of characteristic chondrocytic matrix genes, such as cartilage link protein, cartilage oligomeric matrix protein, aggrecan, and types I, II, and IX collagen, confirmed the induction of the chondrocytic phenotype in high-density culture upon stimulation with BMP2 and transforming growth factor-beta3 (TGFbeta3). Histologic staining of mineralized extracellular matrix with von Kossa, immunostaining of type X collagen (typical for hypertrophic chondrocytes), and gene expression analysis of osteocalcin and adipocyte-specific fatty acid binding protein (aP2) further documented that BMP2 induced chondrogenic lineage development and not osteogenesis and/or adipogenesis in human MSCs. These results suggest BMP2 as a promising candidate for tissue engineering approaches regenerating articular cartilage on the basis of mesenchymal progenitors from bone marrow.