Adipose-derived stromal cells (ADSCs) are multipotent cells which, in the presence of appropriate stimuli, can differentiate into various lineages such as the osteogenic, adipogenic and chondrogenic. In this study, we investigated the effect of transforming growth factor beta 1 (TGF-β1) in comparison to hydrolyzed fish collagen in terms of the chondrogenic differentiation potential of ADSCs. ADSCs were isolated from subcutaneous fat of horses by liposuction. Chondrogenesis was investigated using a pellet culture system. The differentiation medium was either supplemented with TGF-β1 (5 ng/ml) or fish collagen (0.5 mg/ml) for a 3 week period. After the 3 weeks in vitro differentiation, RT-PCR and histological staining for proteoglycan synthesis and type II collagen were performed to evaluate the degree of chondrogenic differentiation and the formation of cartilaginous extracellular matrix (ECM). The differentiation of ADSCs induced by TGF-β1 showed a high expression of glycosaminoglycan (GAG). Histological analysis of cultures stimulated by hydrolyzed fish collagen demonstrated an even higher GAG expression than cultures stimulated under standard conditions by TGF-β1. The expression of cartilage-specific type II collagen and Sox9 was about the same in both stimulated cultures. In this study, chondrogenesis was as effectively induced by hydrolyzed fish collagen as it was successfully induced by TGF-β1. These findings demonstrated that hydrolyzed fish collagen alone has the potential to induce and maintain ADSCs-derived chondrogenesis. These results support the application of ADSCs in equine veterinary tissue engineering, especially for cartilage repair.