It was hypothesized that previously optimized serum-free culture conditions for juvenile bovine chondrocytes could be adapted to generate engineered cartilage with physiologic mechanical properties in a preclinical, adult canine model. Primary or passaged (using growth factors) adult chondrocytes from three adult dogs were encapsulated in agarose, and cultured in serum-free media with transforming growth factor-beta3. After 28 days in culture, engineered cartilage formed by primary chondrocytes exhibited only small increases in glycosaminoglycan content. However, all passaged chondrocytes on day 28 elaborated a cartilage matrix with compressive properties and glycosaminoglycan content in the range of native adult canine cartilage values. A preliminary biocompatibility study utilizing chondral and osteochondral constructs showed no gross or histological signs of rejection, with all implanted constructs showing excellent integration with surrounding cartilage and subchondral bone. This study demonstrates that adult canine chondrocytes can form a mechanically functional, biocompatible engineered cartilage tissue under optimized culture conditions. The encouraging findings of this work highlight the potential for tissue engineering strategies using adult chondrocytes in the clinical treatment of cartilage defects.