Objectives: Adipose-derived stem cells (ASCs) and bone marrow-derived mesenchymal stem cells (MSCs) are multipotent adult stem cells with potential for use in cartilage tissue engineering. We hypothesized that these cells show distinct responses to different chondrogenic culture conditions and extracellular matrices, illustrating important differences between cell types. Methods: Human ASCs and MSCs were chondrogenically differentiated in alginate beads or a novel scaffold of reconstituted native cartilage-derived matrix with a range of growth factors, including dexamethasone, transforming growth factor β3, and bone morphogenetic protein 6. Constructs were analyzed for gene expression and matrix synthesis. Results: Chondrogenic growth factors induced a chondrocytic phenotype in both ASCs and MSCs in alginate beads or cartilage-derived matrix. MSCs demonstrated enhanced type II collagen gene expression and matrix synthesis as well as a greater propensity for the hypertrophic chondrocyte phenotype. ASCs had higher upregulation of aggrecan gene expression in response to bone morphogenetic protein 6 (857-fold), while MSCs responded more favorably to transforming growth factor β3 (573-fold increase). Conclusions: ASCs and MSCs are distinct cell types as illustrated by their unique responses to growth factor-based chondrogenic induction. This chondrogenic induction is affected by the composition of the scaffold and the presence of serum.