Many cell types and cellular microenvironments have been explored for articular cartilage tissue engineering. We compared the potential of bone marrow-derived mesenchymal stem cells (MSCs) and P19 embryonic carcinoma cells (ECCs), a pluripotent derivative of embryonic stem cells (ESCs), for cartilage histogenesis in porous collagen scaffolds in vitro. We found that while both MSCs and ECCs express α-smooth muscle actin (α-SMA), only MSCs exhibit condensation and contraction necessary for cartilage histogenesis. Furthermore, histology confirmed that only MSCs exhibited sulfated glycosaminoglycans and collagen type II formation after 14 days in culture. We conclude that MSCs appear to be superior over ECCs for cartilage regeneration under particular culture conditions. The α-SMA-expressing ECCs may not have contracted due to the absence of actin unit polymerization or the absence of myosin molecules. Our observations may explain the absence of a contractile scar in fetal wound healing. © 2011 Wiley Periodicals, Inc. J Biomed Mater Res Part A:, 2011.