Cartilage damage has been documented as one of the major problems leading to knee repair procedures worldwide. The low availability of cartilage that can be harvested without causing a negative health impact has led to the focus on the potential of stem cells, which have been transplanted into damaged areas and successfully grown into new healthy tissue. This study aims to compare the chondrogenic potential of two stem cell sources--adipose tissue and bone marrow. Stem cells were isolated from donor-matched adipose tissue and bone marrow, following established protocols. The cells were grown in a chondrogenic cocktail containing transforming growth factor-beta3 (TGF-beta3) up till 28 days, and assessed for expression changes of cartilage markers at the gene and protein level, using qualitative and quantitative methods. Controls were included for every time point. Real-time polymerase chain reaction (PCR) results showed increases in the gene expression of collagen II in both the cell types that received TGF-beta3 treatment. However, histological, immunohistochemical, and glycosaminoglycan (GAG) assay clearly showed that collagen II and proteoglycans (PG) were synthesized only in the growth factor-treated bone marrow stem cells (BMSCs). These findings support the results obtained in our in vivo comparative study done on an animal model, suggesting that BMSCs are more suitable than adipose-derived stem cells (ADSCs) for chondrogenesis.