The cartilage tissue has a limited self-regenerative capacity. Tissue-engineering represents a promising trend for cartilage repair. The present study was aimed to develop a biomaterial formulation by combining fragments of chitosan hydrogel with isolated rabbit or human chondrocytes. We first reported the properties of the constructs elaborated with rabbit chondrocytes and pure chitosan physical hydrogels with defined molecular weight, acetylation degree and polymer concentration. Morphological data showed that chondrocytes were not penetrating the hydrogels but tightly bound to the surface of the fragments and spontaneously formed aggregates of combined cell/chitosan. A significant amount of neo-formed cartilage-like extracellular matrix (ECM) was first accumulated in-between cells and hydrogel fragments and furthermore was widely distributed within the neo-construct. The optimal biological response was obtained with hydrogel fragments concentrated at 1.5% (w/w) of polymer made from a chitosan with a degree of acetylation between 30 and 40%. Such hydrogels were then mixed with human chondrocytes. The phenotype of the cells was analyzed by using chondrocytic (mRNA expression of mature type II collagen and aggrecan as well as secretion of proteoglycans of high molecular weight) and non chondrocytic (mRNA expression of immature type II collagen and type I collagen) molecular markers. As compared with human chondrocytes cultured without chitosan hydrogel which rapidly dedifferentiated in primary culture, cells mixed with chitosan rapidly loose the expression of type I and immature type II collagen while they expressed mature type II collagen and aggrecan. In these conditions, chondrocytes maintained their phenotype for as long as 45 days, thus forming cartilage-like nodules. Taken together, these data suggest that a chitosan hydrogel does not work as a scaffold, but could be considered as a decoy of cartilage ECM components, thus favoring the binding of chondrocytes to chitosan. Such a biological response could be described by the concept of reverse encapsulation.