Different therapeutic techniques have been developed for regeneration of articularcartilage injuries, but none of them has provided an optimal solution to the treatment of articularcartilage lesions. MSCs have been considered as a promising alternative cell source for cartilagerepair. Umbilical cord blood is one of the most perspective sources of stem cells used in clinicalpractice. In the present study, thirty umbilical cord blood samples were collected, in addition to 5BM and 5 PB samples, taken as reference controls, being operated upon under the sameconditions. The samples were used for MNCs isolation from which MSCs were expanded at 37ºC with 5% humidified CO2 in the presence of suitable expansion media under complete asepticconditions. The successfully expanded MSCs were verified morphologically and through thepresence of their surface markers CD 44 and CD 105, and absence of haematopoeitic markersCD 34. Then, successfully expanded MSCs were subjected to chondrogenic differentiation in thepresence of TGFβ1 and other growth factors in either pelleted micromass system or monolayercell culture method. Differntiation was verified microscopically using special stains, in additionto by RT-PCR for expression of aggrecan and collagen II genes. The success rate of UCMSCsisolation was (25%) a rate that was lower than those of PB (40%) and BM (80%). Accordingly,certain parameters have been recommended for successful isolation of MSCs from umbilicalcord blood. On selecting the samples in which the recommended parameters were fulfilled, thesuccess rate was increased up to 72%. This was together with providing optimal experimentconditions; mainly the type of expansion medium, which when adjusted, the success rate reached80%. MSCs cultured in pelleted micromass system, possessed the ability to undergochondrogenesis in presence of chondrogenic medium devoid of FBS, as proved by RT-PCR andmicroscopically through special stains. Such differentiation potential opens the door for an easyand available method for the treatment of degenerative cartilage diseases.