Mesenchymal stem cells (MSCs) are promising for the treatment of articular cartilage defects; however, common protocols for in vitro chondrogenesis induce typical features of hypertrophic chondrocytes reminiscent of endochondral bone formation. Aim of the study was to compare chondrogenic differentiation of MSCs in vitro and in vivo in experimental full-thickness cartilage defects, asking whether MSCs can differentiate into collagen type X-negative chondrocytes in an orthotopic environment. Cartilage defects in knees of minipigs were covered with a collagen type I/III membrane, and half of them received transplantation of expanded autologous MSCs. At 1, 3, and 8 weeks, morphological and molecular aspects of repair were assessed. The orthotopic environment triggered a spatially organized repair tissue with upper fibrous, intermediate chondrogenic, and low layer hypertrophic differentiation of cells and a trend to more safranin-O and collagen type II-positive samples after MSC transplantation at 8 weeks. Compared to in vitro chondrogenesis, significant lower COL10A1/COL2A1 and MMP13/COL2A1 ratios were obtained for in vivo differentiation. This indicates that, as opposed to in vitro chondrogenic induction of MSCs, the in vivo signaling molecules and biomechanical stimuli provide an appropriate environment for progenitor cells to differentiate into collagen type X-negative chondrocytes. Thus, until better in vitro induction protocols become available for chondrogenesis of MSCs, their predifferentiation before transplantation may be unfavorable.