To regenerate tissue engineered cartilage as a source for the restoration of cartilage defects, we used a human fetal cartilage progenitor cell (hFCPC) pellet for improve the chondrogenesis and modulation the immune response with a In vivo (IV) bioreactor system, that was buried subcutaneously in the host and then implanted into a cartilage defect. In vivo bioreactor (IVB) was composed of silicone tube and cellulose nanopore-size membrane. FCPC pellets were first cultured in vitro for 3 days, and then cultured in vitro, subcutaneous and IV bioreactor for 3 weeks. First evaluated the IV bioreactor fluid appearance, component and liquidity, and then evaluate chondrogenesis and immunogenicity of the pellets using gross observation, cell viability, histology, biochemical analysis, RT-PCR, and Western Blot, finally evaluates the cartilage repair and synovial inflammation using histology. The fluid color and transparency of IV bioreactor were similar to synovial fluid (SF) and the component was also close to SF compared to the serum. IV bioreactor system not only promotes the synthesis of cartilage matrix and maintains cartilage phenotype, but also delays the occurrence of calcification compared with subcutaneous. A IV bioreactor, which has been predominantly adopted to study cell differentiation, was effective in preventing host immune rejection.