Scaffolds provide a template for cell distribution, growth, differentiation and extracellular matrix accumulation in a three-dimensional environment. Recent studies have demonstrated the potential of scaffolds for enhancing articular cartilage repair both in vitro and in vivo investigations. Mesenchymal stem cells derived from human umbilical cord blood (CBMSCs) have been characterized by their multipotency to differentiate into mesenchyme-lineage cell types, including chondrocytes, osteoblasts, and adipocytes. In this study, chondrogenesis of CBMSCs was performed in a chemically synthesized thermoreversible gelation polymer (TGP). CBMSCs were embedded in the TGP and supplemented with ascorbic acid and transforming growth factor-beta 3. After a 4-week induction, the results showed that CBMSCs formed into spheroid pellets and increased in size. The induced cells in the TGP expressed specific mRNA of collagen type II, aggrecan, and Sox9 for chondrocytes. Furthermore, CBMSCs embedded in TGP had higher ratio of glycosaminoglycan secretion to DNA content than the traditional induction method by aggregating pellet culture. These results demonstrated that chemically synthesized TGP provided a competent 3-dimentional culture environment for CBMSCs to differentiate into chondrocytes and may be applied clinically to induce chondrogenic differentiation of CBMSCs for cartilage repair in the future.