Articular cartilage, the tissue that forms the gliding surface of joints, has a poor regenerative capacity. Insulin-like growth factor-I (IGF-I) is a polypeptide that is anabolic and mitogenic for cartilage. Transfection of articular chondrocytes with an expression plasmid vector containing the cDNA for human IGF-I under the control of the cytomegalovirus promoter/enhancer led to expression of the transgene and synthesis of biologically relevant amounts of IGF-I protein. Transplantation of transfected articular chondrocytes on to the surface of articular cartilage explants led to the formation of a new tissue layer on the cartilage explant surface. The new tissue was characterized by the presence of type II collagen and proteoglycan and by the absence of type I collagen, consistent with hyaline-like cartilage. The tissue formed by the chondrocytes expressing IGF-I was thicker and contained more cells than controls transfected with an expression plasmid vector containing the Escherichia coli (E. coli) beta-galactosidase (lacZ) gene. Transplantation of articular chondrocytes that overexpress human IGF-I also increased DNA synthesis and the synthesis of glycosaminoglycans by the underlying explant cartilage chondrocytes. These results identify a mechanism by which IGF-I may simultaneously promote chondrogenesis and shift cartilage homeostasis in an anabolic direction. The data further suggest that therapeutic growth factor gene transfer may be applicable to articular cartilage.