Cartilage absorption and calcification are prone to occur after the implantation of diced cartilage wrapped with autologous materials, as well as prolong the operation time, aggravate surgical trauma and postoperative pain during the acquisition process. Small intestinal submucosa (SIS) has suitable toughness and excellent degradability, which has been widely used in the clinic. Urine‐derived stem cells (USCs), as a new type of stem cells, have multi‐directional differentiation potential. In this study, we attempt to create the tissue engineering membrane material, termed USCs‐SIS (U‐SIS), and wrap the diced cartilage with it, assuming that they can promote the survival and regeneration of cartilage. In this study, after co‐culture with the SIS and U‐SIS, the proliferation, migration and chondrogenesis ability of the auricular‐derived chondrocyte cells (ACs) were significantly improved. Further, the expression levels of chondrocyte phenotype‐related genes were up‐regulated, whilst that of dedifferentiated genes was down‐regulated. The signal pathway proteins (Wnt3a and Wnt5a) were also participated in regulation of chondrogenesis. In vivo, compared with perichondrium, the diced cartilage wrapped with the SIS and U‐SIS attained higher survival rate, less calcification and absorption in both short and long terms. Particularly, USCs promoted chondrogenesis and modulated local immune responses via paracrine pathways. In conclusion, SIS have the potential to be a new choice of membrane material for diced cartilage graft. U‐SIS can enhance survival and regeneration of diced cartilage as a bioactive membrane material.