Bone marrow cells are routinely accessed clinically for cartilage repair. This study was performed to determine whether adeno-associated virus (AAV) effectively transduces human bone marrow-derived mesenchymal stem cells (hMSC) in vitro, whether AAV infection interferes with hMSC chondrogenesis and whether AAV-transforming growth factor-beta-1 (TGF-b1)-transduced hMSC can improve cartilage repair in vivo. Adult hMSC were transduced with AAVgreen fluorescent protein (GFP) or AAV-transforming growth factor b1 (TGFb1) and studied in pellet cultures. For in vivo studies, AAV-GFP and AAV-TGF-b1-transduced hMSCs were implanted into osteochondral defects of 21 athymic rats. GFP was detected using fluorescent microscopy.Cartilage repair was assessed using gross and histological analysis at 4, 8 and 12 weeks. In pellet culture, GFP expression was visualized in situ through 21 days in vitro. In vivo GFP transgene expression was observed by in situ fluorescent surface imaging in 100% of GFP implanted defects at 2 , 67% at 8 and 17% at 12 weeks. Improved cartilage repair was observed in osteochondral defects implanted with AAV-TGF-b1-transduced hMSC at 12 weeks (P ¼ 0.0047). These results show that AAV is a suitable vector for gene delivery to improve the cartilage repair potential of human mesenchymal stem cells.