Heparan sulfate (HS) interacts with growth factors and has been implicated in regulating chondrogenesis. However, the effect of HS on TGF-β-mediated mesenchymal stem cell (MSC) chondrogenesis and molecular mechanisms remains unknown. In this study, we explored the effects of exogenous HS alone and in combination with TGF-β3 on chondrogenic differentiation of human MSCs and possible signal mechanisms. The results indicated that HS alone had no obvious effects on chondrogenic differentiation of human MSCs and TGF-β/Smad2/3 signal pathways. However, the combined TGF-β3/HS treatment resulted in a significant increase in GAG synthesis, cartilage matrix protein secretion, and cartilage-specific gene expression compared to cells treated with TGF-β3 alone. Furthermore, HS inhibited type III TGF-β receptors (TβRIII) expression and increased TGF-β3-mediated ratio of the type II (TβRII) to the type I (TβRI) TGF-β receptors and phosphorylation levels of Smad2/3. The inhibitor of the TGF-β/Smad signal, SB431542, not only completely inhibited HS-stimulated TGF-β3-mediated Smad2/3 phosphorylation but also completely inhibited the effects of HS on TGF-β3-induced chondrogenic differentiation. These results demonstrate exogenous HS enhances TGF-β3-induced chondrogenic differentiation of human MSCs by activating TGF-β/Smad2/3 signaling.