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The repair of articular cartilage lesions remains a clinical problem. Two novel approaches to cartilage formation, gene transfer and tissue engineering, have been limited by short-term transgene expression in transplanted chondrocytes and inability to deliver regulatory signals to engineered tissues according to specific temporal and spatial patterns. We tested the hypothesis that the transfer of a cDNA encoding the human insulin-like growth factor I (IGF-I) can provide sustained gene expression in cell-polymer constructs in vitro and in vivo and enhance the structural and functional properties of tissue-engineered cartilage. Bovine articular chondrocytes genetically modified to overexpress human IGF-I were seeded into polymer scaffolds, cultured in bioreactors in serum-free medium, and implanted subcutaneously in nude mice; constructs based on nontransfected or lacZ-transfected chondrocytes served as controls. Transgene expression was maintained throughout the duration of the study, more than 4 weeks in vitro followed by an additional 10 days either in vitro or in vivo. Chondrogenesis progressed toward the formation of cartilaginous tissue that was characterized by the presence of glycosaminoglycans, aggrecan, and type II collagen, and the absence of type I collagen. IGF-I constructs contained increased amounts of glycosaminoglycans and collagen and confined-compression equilibrium moduli as compared with controls; all groups had subnormal cellularity. The amounts of glycosaminoglycans and collagen per unit DNA in IGF-I constructs were markedly higher than in constructs cultured in serum-supplemented medium or native cartilage. This enhancement of chondrogenesis by spatially defined overexpression of human IGF-I suggests that cartilage tissue engineering based on genetically modified chondrocytes may be advantageous as compared with either gene transfer or tissue engineering alone.