Tissue compatibility of chitosan-alginate scaffolds was studied in vitro in terms of cell morphology, proliferation, and functionality using HTB-94 cells. The scaffold has an interconnected 3D porous structure, and was fabricated by thermally induced phase separation followed by freeze drying. Cell proliferation on the chitosan-alginate scaffold was found to be faster than on a pure chitosan scaffold. After cell culture for 2 weeks in vitro, the cells on the chitosan scaffold gradually assumed a fibroblast-like morphology while the cells on the chitosan-alginate scaffold retained their spherical morphology throughout the period of study. SDS-PAGE electrophoresis and Western blot assays for proteins extracted from cells grown on scaffolds indicated that production of cartilage-specific collagen type II, a marker for chondrocytic phenotype, increased from week 2 to week 3 on the chitosan-alginate scaffold but decreased on the chitosan scaffold. This study suggested that chitosan-alginate scaffolds promote cell proliferation, enhance phenotype expression of HTB-94 chondrocytes, and may potentially serve as an improved alternative to chitosan scaffolds for cartilage tissue engineering.