Articular cartilage, the load-bearing tissue of the joint, has limited repair and regeneration potential. The scarcity of treatment modalities for large chondral defects has motivated attempts to engineer cartilage tissue constructs that can meet the functional demands of this tissue in vivo. Cartilage tissue engineering requires three components: cells, scaffold, and environment. Adult stem cells, specifically multipotent mesenchymal stem cells, are considered the cell type of choice for tissue engineering, because of the ease with which they can be isolated and expanded and their multilineage differentiation capabilities. Successful outcome of cell-based cartilage tissue engineering ultimately depends on the proper differentiation of stem cells into chondrocytes and the assembly of the appropriate cartilaginous matrix to achieve the load-bearing capabilities of the natural articular cartilage. Multiple requirements, including growth factors, signaling molecules, and physical influences, need to be met. Adult mesenchymal stem-cell-based tissue engineering is a promising technology for the development of a transplantable cartilage replacement to improve joint function.