The differentiation of mesenchymal stem cells (MSCs) into chondrocytes provides an attractive basis for the repair and regeneration of articular cartilage. Under clinical conditions, chondrogenesis will often need to occur in the presence of mediators of inflammation produced in response to injury or disease. The purpose of this study was to examine the effects of 2 important inflammatory cytokines, interleukin-1beta (IL-1beta) and tumor necrosis factor alpha (TNFalpha), on the chondrogenic behavior of human MSCs. Aggregate cultures of MSCs recovered from the femoral intermedullary canal were used. Chondrogenesis was assessed by the expression of relevant transcripts by quantitative reverse transcription-polymerase chain reaction analysis and examination of aggregates by histologic and immunohistochemical analyses. The possible involvement of NF-kappaB in mediating the effects of IL-1beta was examined by delivering a luciferase reporter construct and a dominant-negative inhibitor of NF-kappaB (suppressor-repressor form of IkappaB [srIkappaB]) with adenovirus vectors. Both IL-1beta and TNFalpha inhibited chondrogenesis in a dose-dependent manner. This was associated with a marked activation of NF-kappaB. Delivery of srIkappaB abrogated the activation of NF-kappaB and rescued the chondrogenic response. Although expression of type X collagen followed this pattern, other markers of hypertrophic differentiation responded differently. Matrix metalloproteinase 13 was induced by IL-1beta in a NF-kappaB-dependent manner. Alkaline phosphatase activity, in contrast, was inhibited by IL-1beta regardless of srIkappaB delivery. Cell-based repair of lesions in articular cartilage will be compromised in inflamed joints. Strategies for enabling repair under these conditions include the use of specific antagonists of individual pyrogens, such as IL-1beta and TNFalpha, or the targeting of important intracellular mediators, such as NF-kappaB.