Apart from the immunosuppressive property, which has been widely investigated in the treatment of various autoimmune diseases, bone marrow mesenchymal stem cells (BMMSCs) also exhibit the chondrogenic capacity. Recently, BMMSCs have attracted more and more attention in the remission of rheumatoid arthritis (RA) and the reconstruction of cartilage injury. In addition to the significant regulatory hurdles of systemic treatment by BMMSCs, the poor inhibitory efficiency on articular inflammatory reaction and the inferior result of preventing the persistent destruction of cartilage were observed. Herein, toward the ovalbumin (OVA)-induced arthritis in rabbits, the in situ transplantation of fibrin gel-encapsulated BMMSCs to osteochondral defect was confirmed to result in the decreased levels of cytokines, such as interleukin-1β, interleukin-6, tumor necrosis factor-α, and anti-OVA antibody, in the serum. What is more, the implantation of BMMSCs also inhibited the proliferation of antigen-specific lymphocytes. Meanwhile, the fibrin gel-encapsulated BMMSCs performed outstanding capacity of cartilage repair, resulted in the remission of local joint inflammatory condition, and prevented further articular cartilage damage. The results demonstrated that the transplantation of BMMSCs in fibrin gel to osteochondral defect under arthritic condition could effectively stimulate BMMSCs to exhibit the immunosuppression and cartilage protection capability, as well as cartilage repair. This study provided a new therapeutic strategy for RA-induced cartilage injury through the local transplantation of BMMSCs.