Stem cells derived from synovial lining—synovial lining-derived stem cells or SDSCs—are a promising cell source for cartilage tissue engineering. We hypothesized that negatively selected SDSCs would form cartilage constructs and conventionally passaged SDSCs would be contaminated with macrophages, inhibiting SDSC-based chondrogenesis. We mixed SDSCs with fibrin gel and seeded the cells into polyglycolic acid scaffolds. After 3 days of incubation with a proliferative growth factor cocktail (containing transforming growth factor β1 [TGF-β1], insulin-like growth factor I [IGF-I], and basic fibroblast growth factor [FGF-2]), the cell-fibrin-polyglycolic acid constructs were transferred into rotating bioreactor systems and cultured with a chondrogenic growth factor cocktail (TGF-β1/IGF-I) for up to 4 weeks. Tissue constructs based on negatively selected SDSCs had cartilaginous characteristics; were rich in glycosaminoglycans and collagen II; exhibited high expression of mRNA and protein for collagen II, aggrecan, and Sox 9; exhibited a negligible level of mRNA and protein for collagens I and X; and had an equilibrium modulus in the range of values measured for native human cartilage. Conventional passage yielded SDSCs with contaminating macrophages, which adversely affected the quality of tissue-engineered cartilage. We thus propose functional cartilage constructs could be engineered in vitro through the use of negatively isolated SDSCs.