Repairing articular cartilage defects is a great challenge due to the poor self-regenerative capability of cartilage. Hydrogel-based tissue engineering has been considered an effective strategy. In this study, inspired by mussel chemistry, catechol-modified chitosan (CS-C) hydrogel was prepared under the catalysis of horseradish peroxidase/hydrogen peroxide (HRP/H2O2) for cartilage defect repair in a rat model. The rheological and swelling properties and biodegradation behavior of the CS-C hydrogel were investigated. Besides, the chondrogenic effect of bone mesenchymal stem cells (BMSCs) within the CS-C hydrogel was also assessed in vitro. Moreover, after injecting in rat cartilage defects, the capability of cartilage repair of the BMSC-laden CS-C hydrogel was evaluated in vivo. The results showed that the rheological property, swelling property and biodegradation behavior of the CS-C hydrogel changed with the concentration of CS-C macromolecules. Besides, the CS-C hydrogel had good biocompatibility with BMSCs and could promote the proliferation and chondrogenic differentiation of BMSCs in vitro. As for cartilage defect repair in vivo, through the evaluation of gross observation and histology, the BMSC-laden CS-C hydrogel showed better reconstruction of hyaline cartilage than the untreated group and CS-C hydrogel only. Therefore, CS-C hydrogel laden with BMSC might be a promising strategy for repairing cartilage defects.