Once cartilage is damaged, it has limited potential for self-repair. Autologous chondrocyte implantation is an effective treatment, but patients may suffer during cartilage harvesting and the donor-site morbidity may accelerate joint degeneration. Using autologous mesenchymal stem cells (MSCs) derived chondrocytes is another selection, while it also causes some injuring. The umbilical cord, an ecto-embryo tissue may be an ideal source of cells, because of its accessibility, abundant resources, painless procedures for harvesting, and lack of ethical issues. We isolated MSCs from Wharton's jelly of human umbilical cord (WMSCs), which expressed CD44, CD105 and CD271 but not CD34 and CD45 with flow cytometry analysis. RT-PCR showed not only positive expression of CD90, c-kit, Sca1, SH2 and SH3 but also positive expression of the chondrocyte markers Sox-9 and Col-2A1. WMSCs cultured in high-density in the presence of transforming growth factor β1 and dexamethasone showed cartilage extracellular matrix-secretion and integrated into a thin piece of cell-based membrane. The cell-based thin membrane cultured in rotary cell culture system formed a round, opaque, glistening non-scaffold cartilage-like tissue, larger and condenser than what was formed with conventional pellet culture. Glycosaminoglycan and type II collagen content significantly increased after 3-week culture. The human WMSCs express characteristics of pre-chondrocytes, low immunogenicity and are easy to be obtained with higher purity because there have no hematopoietic cells in Wharton's jelly, so it may be a new seed cells more suitable for constructing tissue-engineered cartilage.