This study was carried out to explore environmental compound such as nicotine can cause adverse effect on chondrogenic differentiation of bone marrow mesenchymal stem cells (BMSCs). Rat BMSCs were capsulated in alginate beads incubated with a chondrogenic differentiation medium and while chondrogenic differentiation of rat BMSCs were cultured for 4 weeks treated with nicotine at concentrations of 25, 50 and 100 μM. The effect of nicotine on BMSCs viability was tested using MTT assay. After chondrogenic differentiation, alginate beads sections were stained for glycosaminoglycan (GAG) with alcian blue and safranin-O. The mRNA expression of chondrogenesis related genes, including collagen type 2 alpha 1 (Col2A1), aggrecan, insulin-like growth factor-1 (IGF-1) were determined by RT-PCR. Nicotine did not affect viability of BMSCs at any indicated concentration. Continuous exposure to nicotine for 4 weeks resulted in significant decrease of the area stained with alcian blue and safranin-O in a concentration-dependent manner compared with the control (P<0.05). After 4 weeks in chondrogenic medium, nicotine dose-dependently decreased the expression of aggrecan, Col2A1 and IGF-1 genes in rat BMSCs chondrogenesis compared with the control (P<0.05). It turned out that nicotine suppresses chondrogenic differentiation potential of BMSCs, leading to a poorly differentiated cartilage.