Meniscal tears in the avascular zone have a poor self-healing potential, however partial meniscectomy predisposes the knee for early osteoarthritis. Tissue engineering with mesenchymal stem cells and a hyaluronan collagen based scaffold is a promising approach to repair meniscal tears in the avascular zone. 4 mm longitudinal meniscal tears in the avascular zone of lateral menisci of New Zealand White Rabbits were performed. The defect was left empty, sutured with a 5–0 suture or filled with a hyaluronan/collagen composite matrix without cells, with platelet rich plasma or with autologous mesenchymal stem cells. Matrices with stem cells were in part precultured in chondrogenic medium for 14 days prior to the implantation. Menisci were harvested at 6 and 12 weeks. The developed repair tissue was analyzed macroscopically, histologically and biomechanically. Untreated defects, defects treated with suture alone, with cell-free or with platelet rich plasma seeded implants showed a muted fibrous healing response. The implantation of stem cell-matrix constructs initiated fibrocartilage-like repair tissue, with better integration and biomechanical properties in the precultured stem cell-matrix group. A hyaluronan-collagen based composite scaffold seeded with mesenchymal stem cells is more effective in the repair avascular meniscal tear with stable meniscus-like tissue and to restore the native meniscus. © 2013 Wiley Periodicals, Inc. J Biomed Mater Res Part B: Appl Biomater 101B: 1133–1142, 2013.