Injuries to the articular cartilage surface are challenging to repair because cartilage possesses a limited capacity for self-repair. The outcomes of current clinical procedures aimed to address these injuries are inconsistent and unsatisfactory. We have developed a novel method for generating hyaline articular cartilage to improve the outcome of joint surface repair. A suspension of 107 swine chondrocytes was cultured under reciprocating motion for 14 days. The resulting dynamic self-regenerating cartilage (dSRC) was placed in a cartilage ring and capped with fibrin and collagen gel. A control group consisted of chondrocytes encapsulated in fibrin gel. Constructs were implanted subcutaneously in nude mice and harvested after 6 weeks. Gross, histological, immunohistochemical, biochemical, and biomechanical analyses were performed. In swine patellar groove, dSRC was implanted into osteochondral defects capped with collagen gel and compared to defects filled with osteochondral plugs, collagen gel, or left empty after 6 weeks. In mice, the fibrin-and collagen-capped dSRC constructs showed enhanced contiguous cartilage matrix formation over the control of cells encapsulated in fibrin gel. Biochemically, the fibrin and collagen gel dSRC groups were statistically improved in glycosaminoglycan and hydroxyproline content compared to the control. There was no statistical difference in the biomechanical data between the dSRC groups and the control. The swine model also showed contiguous cartilage matrix in the dSRC group but not in the collagen gel and empty defects. These data demonstrate the survivability and successful matrix formation of dSRC under the mechanical forces experienced by normal hyaline cartilage in the knee joint. The results from this study demonstrate that dSRC capped with hydrogels successfully engineers contiguous articular cartilage matrix in both nonload-bearing and load-bearing environments.