INTRODUCTION: Adult mesenchymal stem cell therapy has a potential application in the biological treatment of disc degeneration. Our objectives were: to direct adipose-derived mesenchymal stem cells (AD-MSC) from the sand rat to produce a proteoglycan and collagen type I extracellular matrix (ECM) rich in known ECM components of the annulus fibrosis of disc; and to stimulate proteoglycan production by co-culture of human annulus cells with AD-MSC. METHODS: AD-MSC were isolated and characterised by adherence to plastic, appropriate expression of cluster of differentiation (CD) markers, and differentiation to osteoblasts and chondrocytes in vitro. AD-MSC were grown in three-dimensional (3D) culture and treated with or without transforming growth factor beta (TGFbeta) to direct them to produce annulus-like ECM as determined by proteoglycan content and collagen expression. AD-MSC were co-cultured with human annulus cells and grown in 3D culture. RESULTS: AD-MSC produced a proteoglycan and collagen type I rich ECM after treatment with TGFbeta in 3D culture as confirmed by a 48% increase in proteoglycan content assayed by 1,9-dimethylmethylene blue (DMB), and by immunohistochemical identification of ECM components. Co-culture of human annulus and sand rat AD-MSC in 3D culture resulted in a 20% increase in proteoglycan production compared with the predicted value of the sum of the individual cultures. CONCLUSION: Results support the hypothesis that AD-MSC have potential in cell-based therapy for disc degeneration.