Recent advances in tissue engineering offer considerable promise for the repair of focal lesions in articular cartilage. Here we describe (1) the macromolecular organization of tissue-engineered neocartilage grafts at light and electron microscopic levels, (2) their in vitro development, and (3) the effect of chondrocyte dedifferentiation, induced by monolayer expansion, on their resultant structure. We show that grafts produced from primary cultures of chondrocytes are hyaline in appearance with identifiable zonal strata as evidenced by cell morphology, matrix organization, and immunohistochemical composition. Like native articular cartilage, their surface zone contains type I collagen, surface zone proteoglycan, biglycan and decorin with type II collagen, aggrecan, chondroitin sulfate, chondroitin-4-sulfate, and keratan sulfate, becoming more prominent with depth. Assessment of cell viability by Live/Dead staining and cell-cycle analysis with BrDU suggest that the in vitro tissue has a high cellular turnover and develops through both appositional and interstitial growth mechanisms. Meanwhile, cell-tracker studies with CMFDA (5-chloromethyl-fluorescein diacetate) demonstrate that cell sorting in vitro is not involved in their zonal organization. Finally, passage expansion of chondrocytes in monolayer culture causes progressive reductions in graft thickness, loss of zonal architecture, and a more fibrocartilaginous tissue histology, consistent with a dedifferentiating chondrocyte phenotype.