Directing adipose-derived stem cells (ADSCs) toward chondrogenesis is critical for ADSC-based articular cartilage regeneration. Simvastatin (SIM) was reported to promote both chondrogenic and osteogenic differentiation of ADSCs by upregulating bone morphogenetic protein-2 (BMP-2). We previously found that ADSC chondrogenesis is initiated and promoted in a hyaluronan (HA) microenvironment (HAM). Here, we further hypothesized that SIM augments HAM-induced chondrogenesis but not osteogenesis of ADSCs. ADSCs were treated with SIM in a HAM (SIM plus HAM) by HA-coated wells or HA-enriched fibrin (HA/Fibrin) hydrogel, and chondrogenic differentiation of ADSCs was evaluated. SIM plus HAM increased chondrogenesis more than HAM or SIM alone, including cell aggregation, chondrogenic gene expression (collagen type II and aggrecan) and cartilaginous tissue formation (collagen type II and sulfated glycosaminoglycan). In contrast, SIM-induced osteogenesis in ADSCs was reduced in SIM plus HAM, including mRNA expression of osteogenic genes, osteocalcin and alkaline phosphatase (ALP), ALP activity and mineralization. SIM plus HAM also showed the most effective increases in the mRNA expression of BMP-2 and transcription factors of SOX-9 and RUNX-2 in ADSCs, while these effects were reversed by CD44 blockade. HAM suppressed the levels of JNK, p-JNK, P38 and p-P38 in ADSCs, and SIM plus HAM also decreased SIM-induced phosphorylated JNK and p38 levels. In addition, SIM enhanced articular cartilage regeneration, as demonstrated by implantation of an ADSCs/HA/Fibrin construct in an ex vivo porcine articular chondral defect model. The results from this study indicate that SIM may be an enhancer of HAM-initiated MSC-based chondrogenesis and avoid osteogenesis.