To develop a single-unit osteochondral tissue with demineralized bone matrix gelatin (BMG), rabbit chondrocytes were cultured on demineralized bone matrix gelatin for 6 weeks. The engineered osteochondral tissue was characterized with histology, immunolocalization, TEM, SEM, biochemical assay, and gene expression analysis. About 1.3mm viable neo-cartilage was produced on demineralized BMG. RT-PCR, immunohistochemistry, TEM, biochemical assay, and histology revealed hyaline-like cartilage with zonal layers, intense type II collagen expression, and abundant proteoglycan content formed upon BMG compared with normal cartilage. But hydroxyproline content and type I collagen gene and protein expressions were significantly lower. We consider engineering cartilage tissue with chondrocytes cultured on allogenic demineralized BMG is a good approach for osteochondral tissue engineering.