The effectiveness of existing tissue-engineering cartilage (TEC) is known to be hampered by weak integration of biocompatibility, biodegradation, mechanical strength, and microenvironment supplies. The strategy of hydrogel-based TEC holds considerable promise in circumventing these problems. Herein, a non-toxic, biodegradable, and mechanically optimized double-network (DN) hydrogel consisting of polyethylene glycol (PEG) and kartogenin (KGN)-conjugated chitosan (CHI) is constructed using a simple soaking strategy. This PEG-CHI-KGN DN hydrogel possesses favorable architectures, suitable mechanics, remarkable cellular affinity, and sustained KGN release, which can facilitate the cartilage-specific genes expression and extracellular matrix secretion of peripheral blood-derived mesenchymal stem cells (PB-MSCs). Notably, after tracing the transplanted cells by detecting the rabbit sex-determining region Y-linked gene sequence, the allogeneic PB-MSCs are found to survive for even 3 months in the regenerated cartilage. Here, the long-term release of KGN is able to efficiently and persistently activate multiple genes and signaling pathways to promote the chondrogenesis, chondrocyte differentiation, and survival of PB-MSCs. Thus, the regenerated tissues exhibit well-matched histomorphology and biomechanical performance such as native cartilage. Consequently, it is believed this innovative work can expand the choice for developing the next generation of orthopedic implants in the loadbearing region of a living body.