We have investigated whether 5% oxygen tension (O(2)) is beneficial for neocartilage formation when chondrocytes are cultured in transwell-COL inserts. Six million bovine primary chondrocytes were cultured in an insert with DMEM supplemented with 10% fetal bovine serum and antibiotics, with or without glucosamine sulphate (GS) in a 5% or 20% O(2) environment for 2, 4, or 6 weeks. The samples were collected for the histological staining of proteoglycans (PGs) and type II collagen, quantitative reverse transcription with the polymerase chain reaction (RT-PCR) analyses of the mRNA expression of aggrecan and procollagen α(1)(II), procollagen α(2)(I) and hyaluronan synthase 2, quantitation of PGs, and agarose gel electrophoresis. Neocartilage produced at 20% O(2) appeared larger than that at 5% O(2). Histological staining showed that more PGs and type II collagen and better native cartilage structure were produced at 20% than at 5% O(2). The thickness of neocartilage increased during the culture period. Quantitative RT-PCR showed that the procollagen α(1)(II) mRNA expression level was significantly higher at 20% than at 5% O(2). However, no significant difference in gene expression and PG content was found between control and GS-treated cultures at either 20% or 5% O(2). Thus, in contrast to monolayer cultures, engineered cartilage from scaffold-free cultured chondrocytes at 20% O(2) produced better extracellular matrix (ECM) than that at 5% O(2). PGs were mainly large. Exogenous GS was not beneficial for the ECM in scaffold-free chondrocyte cultures.