Common in vitro protocols for chondrogenesis of mesenchymal stem cells (MSCs) induce an inadequate, hypertrophic differentiation cascade reminiscent of endochondral bone formation. We aimed to modify chondrogenic protocols in order to identify potent inducers, promotors, and inhibitors to achieve better chondrogenesis. Nine factors suspected to stimulate or inhibit chondrogenesis were used for chondrogenic in vitro induction of MSC. Differentiation was assessed by immunohistochemistry, alcian-blue staining, qRT-PCR, and quantification of alkaline phosphatase (ALP) activity. Pre-differentiated pellets were transplanted subcutaneously into SCID mice to investigate stable cartilage formation. Transforming growth factor (TGF)-beta was always required for chondrogenic differentiation and deposition of a collagen-type-II-positive extracellular matrix, while bone morphogenetic protein (BMP)-2, -4, -6, -7, aFGF, and IGF-I (10 ng/ml) were alone not sufficiently inductive. Each of these factors allowed differentiation in combination with TGF-beta, however, without preventing collagen type X expression. bFGF or parathyroid hormone-like peptide (PTHrP) inhibited the TGF-beta-responsive COL2A1 and COL10A1 expression and ALP induction when added from day 0 or 21. In line with a reversible ALP inhibition, in vivo calcification of pellets was not prevented. Late up-regulation of PTH1R mRNA suggests that early PTHrP effects may be mediated by a receptor-independent pathway. While TGF-beta was a full inducer, bFGF and PTHrP were potent inhibitors for early and late chondrogenesis, seemed to induce a shift from matrix anabolism to catabolism, but did not selectively suppress COL10A1 expression. Within a developmental window of collagen type II(+)/collagen type X(-) cells, bFGF and PTHrP may allow inhibition of further differentiation toward hypertrophy to obtain stable chondrocytes for transplantation purposes.