Mesenchymal stem cells (MSCs) are a promising cell source for cartilage tissue engineering given their chondrogenic potential. This potential has yet to be fully realized, as the mechanical properties of MSC-based constructs are lower than those of chondrocyte-based constructs cultured identically. The aim of this study was to better understand the transcriptional underpinnings of this functional limitation. Matched chondrocytes and MSCs from three donors were cultured in agarose in a defined medium containing transforming growth factor beta3 (TGF-beta3). We evaluated the compressive mechanical properties and matrix deposition of maturing constructs over 56 days. Transcriptional differences between the two cell types were assessed on day 0 and 28 via microarray analysis and real-time polymerase chain reaction; differential deposition of matrix molecules was assessed by immunohistochemistry. Although the mechanical and biochemical properties of cell-seeded constructs improved with culture duration, MSC values plateaued at day 28, and remained lower than chondrocyte values. Using microarray analysis, 324 genes were identified as mis-expressed during chondrogenesis. Differential expression of 18 genes was validated, and differential deposition of proteoglycan 4 and TGF-beta-induced 68 kDa protein (TGFBI) was confirmed. Temporal expression profiles of these 18 genes showed that some genes were never expressed (chondromodulin), some were expressed at lower levels (proteoglycan 4), and some were expressed only at later time points (TGFBI) in MSCs compared to chondrocytes. These findings further define the complex transcriptional topography of MSC chondrogenesis, and provide new benchmarks for optimizing the growth of MSC-based engineered cartilage.