Restoration of articular cartilage function and structure following pathological or traumatic damage is still considered a challenging problem in the orthopaedic field. Currently, tissue engineering-based reconstruction of articular cartilage is a feasible and continuously developing strategy to restore structure and function. Successful articular cartilage tissue engineering strategy relies largely on several essential components including cellular component, supporting 3D carrier scaffolding matrix, bioactive agents, proper physical stimulants, and safe gene delivery. Designing the right formulations from these components remain the main concern of the orthopaedic community. Utilization of mesenchymal stem cells (MSCs) for articular cartilage tissue engineering is continuously increasing compared to use of chondrocytes. Various sources of MSCs have been investigated including adipose tissue, amniotic fluid, blood, bone marrow, dermis, embryonic stem cells, infrapatellar fat pad, muscle, periosteum, placenta, synovium, trabecular bone, and umbilical cord. MSCs derived from bone marrow and umbilical cord are currently in different phases of clinical trials. A wide range of matrices have been investigated to develop tissue engineering-based strategies including carbohydrate-based scaffolds (agarose, alginate, chitosan/chitin, and hyaluronate), protein-based scaffolds (collagen, fibrin, and gelatin), and artificial polymers (polyglycolic acid, polylactic acid, poly(lactic-co-glycolic acid), polyethylene glycol, and polycaprolactone). Collagen-based scaffolds and photopolymerizable PEG-based scaffolds are currently in different phases of clinical trials. TGF-β1, TGF-β3, BMP-2, and hypoxic environment are the recommended bioactive agents to induce optimum chondrogenesis of MSCs, while TGF-β1, TGF-β3, SOX-9, BMP-2, and BMP-7 genes are the best candidate for gene delivery to MSCs. Electromagnetic field and the combination of shear forces/dynamic compression are the best maturation-promoting physical stimulants.