In this study, a hydrogel composite, based on the thermo-reversible hydrogel of p(NiPAAm-co-AAc) and hyaluronic acid (HA) was used as an injectable cell and growth factor carrier for cartilage tissue engineering applications. Rabbit chondrocytes were embedded in blended hydrogel composites co-encapsulated with the transforming growth factor beta-3 (TGFbeta-3). The blended hydrogel with the embedded chondrocytes and HA co-encapsulating unloaded growth factors and those with the thermo-reversible hydrogel were used as the controls to examine the effects of TGFbeta-3 on neocartilage formation. The blended hydrogel loaded with TGFbeta-3 embedded with chondrocytes were injected subcutaneously into the nude mice. The mice were monitored for 8 weeks after the injection. Both the differentiation and level of cartilage-specific ECM production were significantly higher in the presence of HA and growth factor than in the control without the growth factor. The level of cartilage associated ECM proteins was examined by immunohistochemical staining (collagen types II and X) as well as by Safranin-O and Alcian blue (GAG) staining. The results showed the potential application of blended hydrogel mixed with the growth factor to neocartilage formation.