Of the many cell-based treatments that have been tested in an effort to regenerate osteoarthritic articular cartilage, none have ever produced cartilage that compare with native hyaline cartilage. Studies show that different cell types lead to inconsistent results and for cartilage regeneration to be considered successful, there must be an absence of fibrotic tissue. Here we report of a series of experiments in which bone marrow-derived stem cells (BMSCs) and articular cartilage chondrocytes (ACCs) were mixed in a 1:1 ratio and tested for their ability to enhance cartilage regeneration in three different conditions: (1) in an in vitro differentiation model; (2) in an ex vivo cartilage defect model implanted subcutaneously in mice; and (3) as an intra-articular injection in a meniscectomy-induced OA model in rats. The mixed cells were compared with monocultures of BMSCs and ACCs. In all three experimental models there was significantly enhanced cartilage regeneration and decreased fibrosis in the mixed BMSCs+ACCs group compared with the monocultures. Molecular analysis showed a reduction in vascularization and hypertrophy, coupled with higher chondrogenic gene expression resulting from the BMSCs+ACCs treatment. Together, our data suggest that mixed BMSCs+ACCs treatment is highly chondro-protective and is more effective in regenerating damaged cartilage in both the ex vivo cartilage defect and post-trauma OA disease models. The results from this approach could potentially be used for regeneration of cartilage in OA patients.