Recent studies suggest that bioactive scaffolds can be used to regenerate cartilage by local cell homing. However, the specific cell types participating in regeneration are not fully understood. In this study, we identified a novel type of neural crest like synovial stem cell (NCL‐SSC) residing within the synovial membrane, which has several important characteristics distinct from previously identified stem cells. Protein marker screening revealed that NCL‐SSCs homogeneously expressed neural crest stem cell markers such as Sox1, Sox10, Snail and Vimentin. Furthermore, differentiation assays NCL‐SSCs can be induced into mesenchymal lineages (osteoblasts, adipocytes, and chondrocytes), peripheral neurons and Schwann cells. In addition, we found that the combination of chick embryo extract and basic fibroblast growth factor can maintain the multipotency and maker expression of NCL‐SSCs. Cloning assay showed that the average plating efficiency of NCL‐SSCs is about 10% and the cloned colonies retained the marker expression and multipotency. In summary, our study indentified a new type of local cells in synovial knee joint, which could be an important cell source for in situ tissue engineering.