Cartilage engineering facilitates repair and regeneration of damaged cartilage using engineered tissue that restores the functional properties of the impaired joint. The seed cells used most frequently in tissue engineering, are chondrocytes and mesenchymal stem cells. Seed cells activity plays a key role in the regeneration of functional cartilage tissue. However, seed cells undergo undesirable changes after in vitro processing procedures, such as degeneration of cartilage cells and induced hypertrophy of mesenchymal stem cells, which hinder cartilage tissue engineering. Compared to monoculture, which does not mimic the in vivo cellular environment, co-culture technology provides a more realistic microenvironment in terms of various physical, chemical, and biological factors. Co-culture technology is used in cartilage tissue engineering to overcome obstacles related to the degeneration of seed cells, and shows promise for cartilage regeneration and repair. In this review, we focus first on existing co-culture systems for cartilage tissue engineering and related fields, and discuss the conditions and mechanisms thereof. This is followed by methods for optimizing seed cell co-culture conditions to generate functional neo-cartilage tissue, which will lead to a new era in cartilage tissue engineering.