Osteochondral progenitor cells were used to repair large, full-thickness defects of the articular cartilage that had been created in the knees of rabbits. Adherent cells from bone marrow, or cells from the periosteum that had been liberated from connective tissue by collagenase digestion, were grown in culture, dispersed in a type-I collagen gel, and transplanted into a large (three-by-six-millimeter), full-thickness (three-millimeter) defect in the weight-bearing surface of the medial femoral condyle. The contralateral knee served as a control: either the defect in that knee was left empty or a cell-free collagen gel was implanted. The periosteal and the bone-marrow-derived cells showed similar patterns of differentiation into articular cartilage and subchondral bone. Specimens of reparative tissue were analyzed with use of a semiquantitative histological grading system and by mechanical testing with employment of a porous indenter to measure the compliance of the tissue at intervals until twenty-four weeks after the operation. There was no apparent difference between the results obtained with the cells from the bone marrow and those from the periosteum. As early as two weeks after transplantation, the autologous osteochondral progenitor cells had uniformly differentiated into chondrocytes throughout the defects. This repair cartilage was subsequently replaced with bone in a proximal-to-distal direction, until, at twenty-four weeks after transplantation, the subchondral bone was completely repaired, without loss of overlying articular cartilage. The mechanical testing data were a useful index of the quality of the long-term repair. Twenty-four weeks after transplantation, the reparative tissue of both the bone-marrow and the periosteal cells was stiffer and less compliant than the tissue derived from the empty defects but less stiff and more compliant than normal cartilage. Clinical Relevance: The current modalities for the repair of defects of the articular cartilage have many disadvantages. The transplantation of progenitor cells that will form cartilage and bone offers a possible alternative to these methods. As demonstrated in this report, autologous, bone-marrow-derived, osteochondral progenitor cells can be isolated and grown in vitro without the loss of their capacity to differentiate into cartilage or bone. Sufficient autologous cells can be generated to initiate the repair of articular cartilage and the reformation of subchondral bone. The repair tissues appear to undergo the same developmental transitions that originally led to the formation of articular tissue in the embryo.(ABSTRACT TRUNCATED AT 400 WORDS)