Due to its avascular organization and low mitotic ability, articular cartilage possesses limited intrinsic regenerative capabilities. The aim of this study is to achieve one-step cartilage repair in situ via combining bone marrow stem cells (BMSCs) with a xenogeneic Acellular dermal matrix (ADM) membrane. The ADM membranes were harvested from Sprague-Dawley (SD) rats through standard decellularization procedures. The characterization of the scaffolds was measured, including the morphology and physical properties of the ADM membrane. The in vitro experiments included the cell distribution, chondrogenic matrix quantification, and viability evaluation of the scaffolds. Adult male New Zealand white rabbits were used for the in vivo evaluation. Isolated microfracture was performed in the control (MF group) in the left knee and the tested ADM group was included as an experimental group when an ADM scaffold was implanted through matching with the defect after microfracture in the right knee. At 6, 12, and 24 weeks post-surgery, the rabbits were sacrificed for further research. The ADM could adsorb water and had excellent porosity. The bone marrow stem cells (BMSCs) grew well when seeded on the ADM scaffold, demonstrating a characteristic spindle-shaped morphology. The ADM group exhibited an excellent proliferative capacity as well as the cartilaginous matrix and collagen production of the BMSCs. In the rabbit model, the ADM group showed earlier filling, more hyaline-like neo-tissue formation, and better interfacial integration between the defects and normal cartilage compared with the microfracture (MF) group at 6, 12, and 24 weeks post-surgery. In addition, neither intra-articular inflammation nor a rejection reaction was observed after the implantation of the ADM scaffold. This study provides a promising biomaterial-based strategy for cartilage repair and is worth further investigation in large animal models.