Chondrogenic potential of human adipose derived stem cells (hASCs) makes them a possible source of seeding cells for cartilage tissue engineering. In this study, chondrogenic differentiation of hASCs induced by transduction with replication-deficient adenovirus carrying human transforming growth factor beta2 (Ad5-hTGF beta2) was demonstrated by RT-PCR, immunohistochemistry staining, biochemical and western blot analysis. To evaluate if the in vitro differentiated hASCs could keep their chondrocytic phenotype and produce neo-cartilage in vivo, predifferentiated hASCs were seeded in different scaffolds and implanted in subcutaneous pockets on the dorsum of nude mice. After 4 and 12 weeks culture in vivo, specimens were harvested and examined by histological and immunohistochemical analysis, cartilage-like tissue formation was only found in alginate gel and PLGA/alginate compound groups, in PLGA group, fibrous tissues and angiogenesis ingrowth were observed. These findings demonstrated that adenovirus-mediated hTGF beta2 gene transfer could induce hASCs into a chondrogenic lineage in vitro, however, this predifferentiation did not guarantee ectopic cartilage formation in vivo unless appropriate three-dimensional scaffolds were used as the cell carry vehicles.