Stem cells derived from adipose tissue are a potentially important source for autologous cell therapy and disease modeling, given fat tissue accessibility and abundance. Critical to developing standard protocols for therapeutic use is a thorough understanding of their potential, and whether this is consistent among individuals, hence, could be generally inferred. Such information is still lacking, particularly in children. To address these issues, we have used different methods to establish stem cells from adipose tissue (adipose-derived stem cells [ADSCs], adipose explant dedifferentiated stem cells [AEDSCs]) from several pediatric patients and investigated their phenotype and differentiation potential using monolayer and micromass cultures. We have also addressed the overlooked issue of selective induction of cartilage differentiation. ADSCs/AEDSCs from different patients showed a remarkably similar behavior. Pluripotency markers were detected in these cells, consistent with ease of reprogramming to induced pluripotent stem cells. Significantly, most ADSCs expressed markers of tissue-specific commitment/differentiation, including skeletogenic and neural markers, while maintaining a proliferative, undifferentiated morphology. Exposure to chondrogenic, osteogenic, adipogenic, or neurogenic conditions resulted in morphological differentiation and tissue-specific marker upregulation. These findings suggest that the ADSC "lineage-mixed" phenotype underlies their significant plasticity, which is much higher than that of chondroblasts we studied in parallel. Finally, whereas selective ADSC osteogenic differentiation was observed, chondrogenic induction always resulted in both cartilage and bone formation when a commercial chondrogenic medium was used; however, chondrogenic induction with a transforming growth factor β1-containing medium selectively resulted in cartilage formation. This clearly indicates that careful simultaneous assessment of bone and cartilage differentiation is essential when bioengineering stem cell-derived cartilage for clinical intervention.