Articular cartilage degenerates extensively during arthritis, causing pain and loss of function to millions of Americans. Existing regenerative treatments do not result in a functional cartilage tissue. Microfracturing results in fibrocartilage formation. Mosaicplasty and other autograft procedures may result in donor site morbidity or healing seams. There is a great need for regenerative technologies which will repair cartilage to a functional form. Tissue engineering of cartilage using marrow derived mesenchymal stem cells (MSCs) have mainly focused on scaffold-free high density cell seeding or scaffolds/gels seeded with cells at lower density. Scaffold-free high density seeding presents the merit of mesenchymal condensation driven chondrogenesis. However, pellet condensation requires complex and lengthy bioreactor culture to attain a form and robustness that is suitable for implantation. A scaffold system that would provide the form, mechanical robustness and bioinductivity to the pellets would enable functional delivery of pellets for cartilage repair without lengthy in vitro culture periods. This requires a specialized scaffold system that has a connected macroporous network to accommodate MSC-pellets while having sufficient strength at the face of such macroporosity. We propose a fully load-bearing bioinductive regenerative template that will deliver MSC-pellets at the time of seeding. The regenerative template is fabricated by weaving high-strength collagen threads to form a network of macroporous channels within which MSC pellets are seeded. Remarkably, the mechanics of the woven template matches the mechanics of cartilage at 80% pore volume due in part to biomimicry of the highly desired `arcade architecture' of cartilage. Furthermore, electrocompacted collagen threads are functionalized with heparin for sustained delivery of chondroinductive TGF-?3 locally. To the best of our knowledge, the proposed approach is the only MSC pellet delivery system that synergizes growth factor cues with mesenchymal condensation to increase chondrogenic output, all in a mechanically functional framework. Our hypothesis is MSC-pellet delivery within the framework of TGF-?3 integrated collagen template will result in a functional cartilage tissue. Aim 1 will increase pore connectivity of the scaffold to enable pellet fusion in 3D. The aim will be attained by modifying the existing weaving scheme which confines pellet growth to within individual channels of the scaffold. The modified weaving scheme will increase available pore space. The degree of crosslinking and the collagen thread size will be varied to offset the effects of increased porosity on scaffold stiffness. Second Aim will improve repair outcome on cartilage repair. Chondrogenesis in woven collagen scaffolds will be enhanced by heparin mediated TGF-?3 delivery from collagen threads. Scaffolds with optimal TGF-?3 dose level will be implanted in rabbits to obtain preliminary insight into the scaffold performance in vivo. The project will serve as a foundation of a R01 project that would refine and scale-up the pellet delivery concept to sizeable defects in a porcine animal model.