Periosteal cells are the major cell sources of skeletal progenitors for fracture callus. In order to promote bone repair and cartilage formation, besides the application of exogenous growth factors, physical stimulation is an alternative approach to guide cell differentiation. Investigation of appropriate conditions is essential for forming bone and cartilage. In this work, a membrane-type micro-system was developed to provide cell culture environment and cell stretching stimulation during culture course. Circular and oval culture wells were designed to respectively generate uniform and non-uniform 2-axial tensile strain for stretching primary rabbit periosteal cells. Cell orientation and differentiation were studied after cycling stretching for 2 days. The cells aligned to the stretching axis with high tensile strain in the oval culture wells; while the cells expressed random orientation in the circular culture wells. Different responses were significantly shown when the cells were respectively stimulated by uniform and non-uniform 2-axial tensile strains. On the other hand, osteogenic differentiation was shown when the cells were under either uniform or non-uniform 2-axial tensile strain. However, only non-uniform 2-axial tensile strain could induce mature osteoblasts. In addition, the result revealed chondrocytes could be differentiated only under a large and nearly single dimensional tensile strain. In summary, differentiation of the periosteal cells is highly influenced by 2-dimensional distribution of the tensile strain. This work provides some in-sights of the control of axial tensile strain for periosteal cell differentiation.