Cartilage injury often precipitates osteoarthritis which has driven research to bolster repair in cartilage impact damage. Autologous chondrocytes transduced with rAAV5-IGF-I were evaluated in chondral defects in a well-established large animal model. Cartilage was harvested from the talus of 24 horses; chondrocytes were isolated and stored frozen. Twenty million cells were cultured and transduced with 10(5) AAV vg/cell prior to implantation. Chondrocytes from eight horses were transduced with rAAV5-IGF-I, chondrocytes from eight horses with rAAV5-GFP, and chondrocytes from eight horses were not transduced. A 15 mm full-thickness chondral defect was created arthroscopically in the lateral trochlear ridge of the femur in both femoropatellar joints. Treated defects were filled with naive or gene-enhanced chondrocytes, in fibrin vehicle. Control defects in the opposite limb received fibrin alone. rAAV5-IGF-I transduced chondrocytes resulted in significantly better healing at 8 week arthroscopy and 8 month necropsy examination when compared to controls. At 8 months, defects implanted with cells expressing IGF-I had better histological scores compared to control defects and defects repaired with naive chondrocytes. This included increased chondrocyte predominance and collagen type II, both features of hyaline-like repair tissue. The equine model closely approximates human cartilage healing, indicating AAV-mediated genetic modification of chondrocytes may be clinically beneficial to humans.