Cartilage tissue has limited self-regeneration capacity and current treatment methods often result in fibrocartilage formation. Although collagen has shown the ability to induce chondrogenesis of mesenchymal stem cells (MSCs) and regenerate hyaline cartilage, the application of a pure collagen hydrogel is inherently limited by its fast degradation, poor mechanical properties and excessive cell-mediated shrinkage. To overcome this challenge, we developed a sonication-induced silk-collagen composite hydrogel (COL + SF(S)) and investigated its physicochemical and biological properties compared with a collagen hydrogel (COL) and a non-sonicated silk-collagen composite hydrogel (COL + SF(NS)). The results showed that the sonication treatment of silk fibroin induced antiparallel β-sheet formation and a stronger negative charge on the silk fibroin molecule, which resulted in improved mechanical properties of the COL + SF(S) hydrogel. The COL + SF(S) hydrogel exhibited superior stability during cell culture and promoted the gene expression of SOX9 at the early stage and sulfated glycosaminoglycan (sGAG) deposition without any exogenous growth factor. Moreover, the cartilage regeneration capacity of the COL + SF(S) group was evaluated in rabbit knee defects. The COL + SF(S) group exhibited well-integrated articular hyaline cartilage closely resembling native articular cartilage after 6 months. Overall, the COL + SF(S) hydrogel holds great potential as a scaffold material to regenerate functional hyaline cartilage.