Cartilage defects are usually caused by acute trauma and chronic degeneration. However, it is still a great challenge to improve the repair of articular cartilage defects due to the limited self-regeneration capacity of such defects. Herein, a novel ROS-responsive in situ nanocomposite hydrogel loaded with kartogenin (KGN) and bone marrow-derived stem cells (BMSCs) was designed and constructed via the enzymatic reaction of fibrinogen and thrombin. Meanwhile, a ROS-responsive thioketal (TK)-based liposome was synthesized to load the chondrogenesis-inducing factor KGN, the bioenzyme thrombin and an ultrasound-sensitive agent PpIX. Under ultrasound stimulation, the TK-based liposome was destroyed, followed by in situ gelation of fibrinogen and thrombin. Moreover, sustained release of KGN was realized by regulating the ultrasound conditions. Importantly, ROS generation and KGN release within the microenvironment of the in situ fibrin hydrogel significantly promoted chondrogenic differentiation of BMSCs via the Smad5/mTOR signalling pathway and effectively improved cartilage regeneration in a rat articular cartilage defect model. Overall, the novel in situ nanocomposite hydrogel with ROS-controlled drug release has great potential for efficient cartilage repair.