Cartilage regeneration is hindered due to the low proliferative capacity of chondrocytes and the avascular nature of cartilaginous tissue. Mesenchymal stromal cells (MSCs) are widely studied for cartilage tissue engineering, and the aggregation of MSCs into high-density cell spheroids facilitates chondrogenic differentiation due to increased cell-cell contact. Despite the promise of MSCs, the field would benefit from improved strategies to regulate the chondrogenic potential of MSCs differentiated from induced pluripotent stem cells (iPSCs), which are advantageous for their capacity to yield large numbers of required cells. We previously demonstrated the ability of MSC-secreted extracellular matrix (ECM) to promote MSC chondrogenic differentiation, but the combinatorial effect of iPSC-derived MSC (iMSC) spheroids, iMSC-derived decellularized ECM (idECM), and other stimuli (e.g., oxygen tension and transforming growth factor [TGF]-β) on chondrogenic potential has not been described. Similar to MSCs, iMSCs secreted a collagen-rich ECM. When incorporated into spheroids, idECM increased spheroid diameter and promoted chondrogenic differentiation. The combination of idECM loading, chondrogenic media, and hypoxia enhanced glycosaminoglycan (GAG) content 1.6-fold (40.9 ± 4.6 ng vs. 25.6 ± 3.3 ng, < 0.05) in iMSC spheroids. Compared with active TGF-β1, the presentation of latent TGF-β1 resulted in greater GAG content (26.6 ± 1.8 ng vs. 41.9 ± 4.3 ng, < 0.01). Finally, we demonstrated the capacity of individual spheroids to self-assemble into larger constructs and undergo both chondrogenic and hypertrophic differentiation when maintained in lineage-inducing media. These results highlight the potential of idECM to enhance the efficacy of chondrogenic stimuli for improved cartilage regeneration using human MSCs and iMSCs.