Osteoarthritis (OA) is a common joint disorder characterized by cartilage degeneration, often leading to pain and functional impairment. Minced cartilage implantation (MCI) has emerged as a promising one-step alternative for large cartilage defects. However, the source of chondrocytes for MCI remains a challenge, particularly in advanced OA, as normal cartilage is scarce. We performed in vitro studies to evaluate the feasibility of MCI using osteophyte cartilage, which is present in patients with advanced OA. Osteophyte and articular cartilage samples were obtained from 22 patients who underwent total knee arthroplasty. Chondrocyte migration and proliferation were assessed using cartilage fragment/atelocollagen composites to compare the characteristics and regenerative potential of osteophytes and articular cartilage. Histological analysis revealed differences in cartilage composition between osteophytes and articular cartilage, with higher expression of type X collagen and increased chondrocyte proliferation in the osteophyte cartilage. Gene expression analysis identified distinct gene expression profiles between osteophytes and articular cartilage; the expression levels of COL2A1, ACAN, and SOX9 were not significantly different. Chondrocytes derived from osteophyte cartilage exhibit enhanced proliferation, and glycosaminoglycan production is increased in both osteophytes and articular cartilage. Osteophyte cartilage may serve as a viable alternative source of MCI for treating large cartilage defects in OA.