The properties of regenerated cartilage using bone marrow-derived mesenchymal stem cells (MSCs) and poly lactic-co-glycolic acid (PLGA) scaffold composites pretreated with TGF-beta3 were investigated and compared to the non-TGF-beta3 treated MSCs/PLGA composites in a rabbit model. We prepared MSCs/PLGA scaffold composites and pretreated it with TGF-beta3 for 3 weeks prior to transplantation. Then, composites were transplanted to the osteochondral defect in the rabbit knee. After 12 weeks of transplantation, 10 of the 12 rabbits in which TGF-beta3 pretreated MSCs/PLGA scaffold composites were transplanted showed cartilaginous regeneration. In gross morphology, regenerated cartilage showed smooth, flush, and transparent features. In indentation test, this had about 80% of Young's modulus of normal articular cartilage. Histological examination demonstrated hyaline like cartilage structures with glycosaminoglycan and type II collagen expression. Histological scores were not statistically different to the normal articular cartilage. These results showed improvement of cartilage regeneration compared to the non-TGF-beta3 pretreated MSCs/PLGA scaffold composite transplanted group. Thus, we have successfully regenerated improved hyaline-like cartilage and determined the feasibility of treating damaged articular cartilage using MSCs/PLGA scaffold composite pretreated with TGF-beta3. Also, we suggest this treatment modality as another concept of cartilage tissue engineering.