Genetic modification of bone marrow-derived mesenchymal stem cells (MSCs) for use in transplantation settings may be a valuable strategy to enhance the repair processes in articular cartilage defects. Here, we evaluated the potential of overexpressing the transforming growth factor beta (TGF-beta) via recombinant adeno-associated virus (rAAV) vector-mediated gene transfer to promote the chondrogenic differentiation of human MSCs (hMSCs). A human TGF-beta sequence was delivered to undifferentiated and chondrogenically-induced primary hMSCs using rAAV vectors to test the efficacy and duration of transgene expression and its effects on the chondrogenic, osteogenic, and adipogenic differentiation patterns of the cells compared with control (lacZ) treatment after 21 days in vitro. Significant, durable TGF-beta expression was noted both in undifferentiated and chondrogenically-induced hMSCs transduced with the candidate rAAV-hTGF-beta vector for up to 21 days compared with rAAV-lacZ treatment, allowing for increased proliferative, metabolic, and chondrogenic activities via stimulation of the critical SOX9 chondrogenic pathway. Overexpression of TGF-beta in the conditions applied here also activated the hypertrophic and osteogenic differentiation processes in the treated cells. Such effects were noted in association with enhanced levels of beta-catenin and Indian hedgehog and decreased PTHrP expression. The current findings show that rAAV vectors provide advantageous vehicles for gene- and stem cell-based approaches to treat articular cartilage defects, requiring a tight regulation of TGF-beta expression to avoid hypertrophy as candidate treatment for future applications in clinically relevant animal models in vivo.