Degeneration of the intervertebral disc (IVD) is a progressive and chronic process, and the high incidence of discogenic disorders calls for new therapeutic approaches, such as cell-based therapies using three dimensional cultures and mesenchymal stem cells (MSC), which can differentiate to chondrogenic- and IVD-lineages. Here, we investigated the growth and differentiation of human MSC culture on biodegradable collagen scaffolds in order to obtain an injectable suspension. Commercially available wound dressings were downsized to dimensions between 100 and 1500 μm and seeded with freshly isolated or early passages MSC. Proliferation rate and chondrogenic differentiation potential was tested at oxygenation levels of 2%, 5%, 10% and 21% in static and dynamic cultures. Evaluation methods included cell viability test, disc marker genes expression (aggrecan, collagen type I and type II), histological detection of proteoglycans and immunohistochemical analysis. On microcarriers, freshly isolated MSC had lower proliferation rate and chondrogenic differentiation potential compared with early passages MSC. Proliferation of MSC was significantly increased 1.7-fold at 5% oxygen level and in combination with dynamic culture was further increased to 2.3-fold, with respect to normoxia. Chondrogenesis was positively affected by 2% and 5% hypoxia, as shown by increased transcription levels and protein expression of collagen type II and proteoglycan accumulation in static cultures, while it was inhibited in dynamic cultures. Collagen type I and aggrecan expression were not affected by hypoxia. In conclusion, collagen based microcarriers are a suitable support for in vitro MSC growth and chondrogenesis especially when cultured at 5% oxygen level.