The application of chondrogenic gene sequences to human bone marrow-derived mesenchymal stromal cells (hMSCs) is an attractive strategy to activate the reparative activities of these cells as a means to enhance the processes of cartilage repair using indirect cell transplantation procedures that may improve the repopulation of cartilage lesions. In the present study, we examined the feasibility of co-delivering the highly competent transforming growth factor beta (TGF-β) with the insulin-like growth factor I (IGF-I) in hMSCs via recombinant adeno-associated virus (rAAV) vector-mediated gene transfer prior to implantation in a human model of osteochondral defect (OCD) ex vivo that provides a microenvironment similar to that of focal cartilage lesions. The successful co-overexpression of rAAV TGF-β/IGF-I in implanted hMSCs promoted the durable remodeling of tissue injury in human OCDs over a prolonged period of time (21 days) relative to individual gene transfer and the control (reporter lacZ gene) treatment, with enhanced levels of cell proliferation and matrix deposition (proteoglycans, type-II collagen) both in the lesions and at a distance, while hypertrophic, osteogenic, and catabolic processes could be advantageously delayed. These findings demonstrate the value of indirect, progenitor cell-based combined rAAV gene therapy to treat human focal cartilage defects in a natural environment as a basis for future clinical applications.