Pellet cultures are commonly used to study chondrogenic differentiation in vitro. Our laboratory has demonstrated pellets made with chondrocytes grow in size during culture and produce cartilage matrix, but pellets made with adipose-derived mesenchymal stem cells (ASC) grow only slightly, producing little cartilage matrix. The objective of this study was to determine if differences in chondrocyte and ASC pellet growth result from differences in cell proliferation or in deposition of extracellular matrix. Primary chondrocytes and ASC from adult pigs were cultured in Dulbecco’s modified Eagle’s medium (DMEM) with 10% fetal bovine serum. To determine baseline proliferation rates in monolayer culture, cells were grown on coverslips in 10 µM bromodeoxyuridine (BrdU) for 24 h and immunostained for BrdU labelling. For pellet cultures, 5 × 105 cells were placed in 15 mL-conical tubes, pelleted by centrifugation in 1.0 mL of chondrogenic base media (CBM: DMEM + 40 µg mL–1 of proline, 50 µM ascorbic acid-2-phosphate, 100 nM dexamethasone, and 1× insulin-transferrin-selenium), and cultured in CBM for 1, and 4 weeks. To detect proliferation in pellets, 1- and 2-week cultured samples were labelled with 10 µM BrdU for 24 h before harvest. Pellets were fixed with 4% paraformaldehyde, embedded, and sectioned on a Leica CM1900 cryostat (Leica Microsystems, Wetzlar, Germany). To assess chondrogenic differentiation and matrix expression, sections were stained for collagen II, keratin sulfate, and chondroitin sulfate. Images were captured and distance between adjacent nuclei in 1- and 4-week pellets were measured using Zeiss imaging software. As expected, cells on coverslips showed BrdU labelling, with higher labelling in ASC cultures indicating faster proliferation (n = 5, 77.3 ± 3.74% chondrocyte v. 92.1 ± 2.88% ASC; α = 0.05; P < 0.0001; Student’s t-test). However, BrdU labelling was not seen in sections from ASC or chondrocyte pellets (n = 5), at either 1 or 2 weeks. Absence of cellular proliferation in pellets was verified by negative staining for the mitotic marker Aurora KinaseB (AurKB). Cartilage matrix staining was strong in chondrocyte pellets at all time points and absent in ASC pellets. Cell nuclei were closely packed in both ASC and chondrocyte pellets at 1 week, but a significant increase in distance between adjacent nuclei with interspersed matrix staining was noted in chondrocyte pellets at 4 weeks (n = 4, 11.88 ± 0.67 µm at 1 week v. 26.85 ± 2.06 µm at 4 weeks; α = 0.05; P < 0.0001; Student’s t-test). As TGFβ3 has been shown to induce chondrogenesis in ASC, ASC pellets were cultured in CBM + 10 ng of TGFβ3 for 1 and 2 weeks (n = 4). The TGFβ3 treatment did not induce cell proliferation in pellets, as sections were negative for BrdU. However, expression of cartilage markers keratan sulfate and chondroitin were noted. Based on our data, neither ASC nor chondrocytes proliferate in pellet culture, and chondrocyte pellet growth is due to extracellular matrix deposition.