It has been recently demonstrated that synovial fibroblasts (SFs) contain a multipotent mesenchymal cell population. To examine the chondrogenic potentialities of SFs in vitro and in vivo, SFs were isolated from knee joints of rabbits or rheumatoid arthritis patients, and infected with adenovirus vectors carrying LacZ (control), constitutively active forms of activin receptor like kinase (ALK)-3 or ALK-5 genes. Efficient gene transduction was confirmed by β-galactosidase staining of the LacZ virus-infected SFs. Northern blotting of type II collagen and aggrecan genes showed clear induction of these genes in SFs infected with ALK-3 virus, while no chondrogenic phenotypes were observed in LacZ or ALK-5-infected cells. ALK-3 virus-infected SFs were also positively stained by Alcian blue staining and type II collagen immunostaining. When transplanted into cartilage defects of rabbit knee joints, ALK-3 virus-infected rabbit SFs produced repair cartilage of hyaline morphology containing a type II collagen-positive matrix that restored the articular surface. These results suggest that adenovirus vector-mediated ALK-3 gene expression can induce chondrogenic differentiation of synovial fibroblasts, and that they are promising candidates for cell-based therapies for articular cartilage defects.