Synovium-derived mesenchymal stem cells (SMSC), a novel line of stem cells, are regarded as a promising cell source for cartilage tissue engineering. The goal of this study was to investigate rabbit SMSC coupled with injectable gellan hydrogels for in vitro engineered cartilage. SMSC were isolated from rabbit synovial tissue, amplified to passage 4 in monolayer, and encapsulated in injectable gellan hydrogels, constructs of which were cultured in chondrogenic medium supplemented with TGF-b1, TGF-b3 or BMP-2 for up to 42 days. The quality of the constructs was assessed in terms of cell proliferation and chondrocytic gene/protein expression using WST-1 assay, real-time RT-PCR, biochemical analysis, histology and immunohistochemical analysis. Results indicate that the viability of SMSC in hydrogels treated with TGF-b1, TGF-b3 and BMP-2 remained high at culture time. The constructs formed cartilaginous tissue with the expression of chondrocytic genes (collagen type II, aggrecan, biglycan, SOX 9) and cartilaginous matrix (sulphated glycosaminoglycan and collagen) as early as 21 days in culture. Both TGF-b1 and TGF-b3 treated SMSC-laden hydrogels showed more chondrogenesis compared with BMP-2 treated SMSC-laden hydrogels. It demonstrates that injectable SMSC-laden gels, when treated with TGF-b1, TGF-b3 or BMP-2, are highly competent for in vitro engineered cartilage formation, which lays a foundation for their potential application in clinical cartilage repair.