As a promising strategy for the successful regeneration of articular cartilage, tissue engineering has received increasing recognition of control release. Two kinds of functional poly (alanine ethyl ester-co-glycine ethyl ester) phosphazene microspheres with different ratios of side-substituent groups were synthesized by emulsion technique. The rate of degradation/hydrolysis of the polymers was carefully tuned to suit the desired application for control release. For controlled delivery of growth factors, the microspheres overcame most of severe side effects linked to demineralized bone matrix (DBM) scaffolds, which had been previously optimized for cartilage regeneration. The application of scaffolds in chondrogenic differentiation was investigated by subcutaneous implantation in nude mice. In the present study, we have provided a novel microsphere-incorporating demineralized bone matrix (MS/DBM) scaffolds to release transforming growth factor-β1 or insulin-like growth factors-1. Laser confocal fluorescence staining showed that the surface of microspheres was a suitable environment for cell attachment. Histological and immunohistochemical evaluations have shown that significantly more cartilaginous extracellular matrix was detected in MS/DBM group when compared with DBM alone group (P<0.05). In addition, the biomechanical test showed that this composite scaffold exhibited favorable mechanical strength as a delivery platform. In conclusion, we demonstrated that MS/DBM scaffolds was sufficient to support stem bone marrow-derived mesenchymal stem cells chondrogenesis and neo-cartilage formation.