Cartilage has little intrinsic capacity for repair, so transplantation of exogenous cartilage cells is considered a realistic option for cartilage regeneration. We explored whether human-induced pluripotent stem cells (hiPSCs) could represent such unlimited cell sources for neo-cartilage comparable to human primary articular chondrocytes (hPACs) or human bone marrow-derived mesenchymal stromal cells (hBMSCs). For this, chondroprogenitor cells (hiCPCs) and hiPSC-derived mesenchymal stromal cells (hiMSCs) were generated from two independent hiPSC lines and characterized by morphology, flow cytometry, and differentiation potential. Chondrogenesis was compared to hBMSCs and hPACs by histology, immunohistochemistry, and RT-qPCR, while similarities were estimated based on Pearson correlations using a panel of 20 relevant genes. Our data show successful differentiations of hiPSC into hiMSCs and hiCPCs. Characteristic hBMSC markers were shared between hBMSCs and hiMSCs, with the exception of CD146 and CD45. However, neo-cartilage generated from hiMSCs showed low resemblances when compared to hBMSCs (53%) and hPACs (39%) characterized by lower collagen type 2 and higher collagen type 1 expression. Contrarily, hiCPC neo-cartilage generated neo-cartilage more similar to hPACs (65%), with stronger expression of matrix deposition markers. Our study shows that taking a stepwise approach to generate neo-cartilage from hiPSCs via chondroprogenitor cells results in strong similarities to neo-cartilage of hPACs within 3 weeks following chondrogenesis, making them a potential candidate for regenerative therapies. Contrarily, neo-cartilage deposited by hiMSCs seems more prone to hypertrophic characteristics compared to hPACs. We therefore compared chondrocytes derived from hiMSCs and hiCPCs with hPACs and hBMSCs to outline similarities and differences between their neo-cartilage and establish their potential suitability for regenerative medicine and disease modelling.