Damaged articular cartilage, caused by traumatic injury or degenerative diseases, has a limited regenerative capacity and frequently leads to the onset of osteoarthritis. As a promising strategy for the successful regeneration of long-lasting hyaline cartilage, tissue engineering has received increasing recognition. In this study, we attempted to design a novel type of porous chitosan scaffold, containing transforming growth factor-beta1 (TGF-beta1), to enhance chondrogenesis. First, to achieve a sustained release of TGF-beta1, chitosan microspheres loaded with TGF-beta1 (MS-TGFs) were prepared by the emulsion method, in the presence of tripolyphosphate; with an identical manner, microspheres loaded with BSA, a model protein, were also prepared. Both microspheres containing TGF-beta1 and BSA had spherical shapes with a size ranging from 0.2 to 1.5 microm. From the release experiments, it was found that both proteins were slowly released from the microspheres over 5 days in a PBS solution (pH 7.4), in which the release rate of TGF-beta1 was much lower than that of BSA. Second, MS-TGFs were seeded onto the porous chitosan scaffold, prepared by the freeze-drying method, to observe the effect on the proliferation and differentiation of chondrocytes. It was obviously demonstrated from in vitro tests that, compared to the scaffold without MS-TGF, the scaffold containing MS-TGF significantly augments the cell proliferation and production of extracellular matrix, indicating the role of TGF-beta1 released from the microspheres. These results suggest that the chitosan scaffold containing MS-TGF possesses a promising potential as an implant to treat cartilage defects.