Although cartilage defects are common features of osteoarthritis and rheumatoid arthritis, current treatments can rarely restore the full function of native cartilage. Recent studies have provided new perspectives for cartilage engineering using multipotent mesenchymal stromal cells (MSC). Moreover, MSC have been used as immunosuppressant agents in autoimmune diseases and have tested successfully in animal models of arthritis. However, the sequential events occurring during chondrogenesis must be fully understood before we can reproduce the complex molecular events that lead to MSC differentiation and long-term maintenance of cartilage characteristics in the context of chronic joint inflammation. This chapter focuses on the potential of MSC to repair cartilage, with an emphasis on the factors that are known to be required in inducing chondrogenesis and on their immunosuppressive potential.