Since defects of articular cartilage are not completely restored, many attempts have been made to repair articular cartilage defects. Cell transplantation is one of the most promising methods but origin of the cells is one of the clinical problems in cell therapy. Embryonic stem (ES) cells are considered to be a potential tool for repairing articular cartilage defects, but so far it has been impossible to cause these cells to differentiate into chondrocytes exclusively, either in vivo or in vitro. First, we injected ES cells into knee joints of SCID mice because we thought that joint might be chondrogenic. ES cells formed teratomas in joints. They grew bigger and bigger and subsequently they destroyed joints (Rheumatology 2003). Secondly, we transplanted ES cells into articular cartilage defects in immunosuppressed rats. ES cells (AB2.2 or CCE cells) were transplanted into articular cartilage defects in the patellar groove of immunosuppressed rats treated with cyclosporine, and histologically observed until 8 weeks after transplantation. To determine whether the repair tissue in the defect in the AB2.2 transplanted group was derived from the transplanted cells, the neomycin-resistant gene, which had been transfected into AB2.2 cells but does not exist in rat cells, was used for detection. The cells produced cartilage, resulting in repair of the defects from 4 weeks until 8 weeks after the transplantation without forming any teratomas. The neomycin-resistant gene was detected in every sample demonstrating that the repair tissue in the AB2.2 transplanted group was derived from the transplanted AB2.2 cells. The environment of osteochondral defects is chondrogenic for ES cells. ES cells may thus be a potential tool for repairing articular cartilage defects (Cell Transplantation 2004). To explore the effect of mechanical environment on the differentiation might stimulate the differentiation of ES cells during the articular cartilage repair, we immobilized the knee joints after the transplantation of ES cells into the full-thickness articular cartilage defects in rat knees. Large mass of teratomas were formed in all the knees of immobilized group, whereas the knee defects of all the joint-free group were filled with hyaline-cartilage tissue. One mechanical factor plays an important role on differentiation of ES-cells to form hyaline cartilage tissue (J Orthop Res 2008). Although some problems remain unsolved, ES cells are thought to be among the most promising sources for use in tissue repair because these cells are capable of both proliferation and differentiation.