In an effort to develop an effective source of clinically relevant cells and tissues for cartilage repair a directed differentiation method was used to generate articular chondrocytes and cartilage tissues from human embryonic stem cells (hESCs). It has previously been demonstrated that chondrocytes derived from hESCs retain a stable cartilage-forming phenotype following subcutaneous implantation in mice. In this report, the potential of hESC-derived articular-like cartilage to repair osteochondral defects created in the rat trochlea was evaluated. Articular cartilage-like tissues were generated from hESCs and implanted into the defects. After 6 and 12 weeks, the defects were evaluated histologically and immunohistochemically, and the quality of repair was assessed using a modified ICRS II scoring system. Following 6 and 12 weeks after implantation, hESC-derived cartilage tissues maintained their proteoglycan and type II collagen-rich matrix and scored significantly higher than control defects, which had been filled with fibrin glue alone. Implants were found to be well integrated with native host tissue at the basal and lateral surfaces, although implanted human cells and host cells remained regionally separated. A subset of implants underwent a process of remodeling similar to endochondral ossification, suggesting the potential for a single cartilaginous implant to promote the generation of new subchondral bone in addition to repair of the articular cartilage. The ability to create cartilage tissues with integrative and reparative properties from an unlimited and robust cell source represents a significant advance for cartilage repair that can be further developed in large animal models before clinical- setting application.