The stem cells that safeguard synovial joints in adulthood are undefined. Studies on mesenchymal stromal/stem cells (MSCs) have mainly focused on bone marrow. Here we show that lineage tracing of Gdf5-expressing joint interzone cells identifies in adult mouse synovium an MSC population largely negative for the skeletal stem cell markers Nestin-GFP, Leptin receptor and Gremlin1. Following cartilage injury, Gdf5-lineage cells underpin synovial hyperplasia through proliferation, are recruited to a Nestin-GFPhigh perivascular population, and contribute to cartilage repair. The transcriptional co-factor Yap is upregulated after injury, and its conditional ablation in Gdf5-lineage cells prevents synovial lining hyperplasia and decreases contribution of Gdf5-lineage cells to cartilage repair. Cultured Gdf5-lineage cells exhibit progenitor activity for stable chondrocytes and are able to self-organize three-dimensionally to form a synovial lining-like layer. Finally, human synovial MSCs transduced with Bmp7 display morphogenetic properties by patterning a joint-like organ in vivo. Our findings further the understanding of the skeletal stem/progenitor cells in adult life.