A major area in regenerative medicine is the application of stem cells in cartilage tissue engineering and reconstructive surgery. This requires well-defined and efficient protocols for directing the differentiation of stem cells into the chondrogenic lineage, followed by their selective purification and proliferation in vitro. The development of such protocols would reduce the likelihood of spontaneous differentiation of stem cells into divergent lineages upon transplantation, as well as reduce the risk of teratoma formation in the case of embryonic stem cells. Additionally, such protocols could provide useful in vitro models for studying chondrogenesis and cartilaginous tissue biology. The development of pharmacokinetic and cytotoxicity/genotoxicity screening tests for cartilage-related biomaterials and drugs could also utilize protocols developed for the chondrogenic differentiation of stem cells. Hence, this review critically examines the various strategies that could be used to direct the differentiation of stem cells into the chondrogenic lineage in vitro.