Epigenetic modification is a key driver of differentiation, and the deacetylase Sirtuin1 (SIRT1) is an established regulator of cell function, ageing, and articular cartilage homeostasis. Here we investigate the role of SIRT1 during development of chondrocytes by using human embryonic stem cells (hESCs). HESC‐chondroprogenitors were treated with SIRT1 activator; SRT1720, or inhibitor; EX527, during differentiation. Activation of SIRT1 early in 3D‐pellet culture led to significant increases in the expression of ECM genes for type‐II collagen (COL2A1) and aggrecan (ACAN), and chondrogenic transcription factors SOX5 and ARID5B, with SOX5 ChIP analysis demonstrating enrichment on the chondrocyte specific –10 (A1) enhancer of ACAN. Unexpectedly, when SIRT1 was activated, while ACAN was enhanced, glycosaminoglycans (GAGs) were reduced, paralleled by down regulation of gene expression for N‐acetylgalactosaminyltransferase type 1 (GALNT1) responsible for GAG chain initiation/elongation. A positive correlation between ARID5B and COL2A1 was observed, and co‐IP assays indicated association of ARID5B with SIRT1, further suggesting that COL2A1 expression is promoted by an ARID5B‐SIRT1 interaction. In conclusion, SIRT1 activation positively impacts on the expression of the main ECM proteins, while altering ECM composition and suppressing GAG content during human cartilage development. These results suggest that SIRT1 activity has a differential effect on GAGs and proteins in developing hESC‐chondrocytes and could only be beneficial to cartilage development and matrix protein synthesis if balanced by addition of positive GAG mediators.