Articular cartilage has a limited capacity for self-repair. Untreated injuries of cartilage may lead to osteoarthritis. This problem demands new effective methods to reconstruct articular cartilage. Mesenchymal stem cells (MSCs) have the proclivity to differentiate along multiple lineages giving rise to new bone, cartilage, muscle, or fat. This study was an animal model for autologous effects of transplantation of MSCs with a collagen-poly(vinyl alcohol) (PVA) scaffold into full-thickness osteochondral defects of the stifle joint in the rabbit as an animal model. A group of 10 rabbits had a defect created experimentally in the full thickness of articular cartilage penetrated into the subchondral space in the both stifle joints. The defect in the right stifle was filled with MSCs/collagen-PVA scaffold (group I), and in the left stifle, the defect was left without any treatment as the control group (group II). Specimens were harvested at 12 weeks after implantation, examined histologically for morphologic features, and stained immunohistochemically for type-II collagen. Histology observation showed that the MSCs/collagen-PVA repair group had better chondrocyte morphology, continuous subchondral bone, and much thicker newly formed cartilage compared with the control group at 12 weeks post operation. There was a significant difference in histological grading score between these two groups. The present study suggested that the hybrid collagen-PVA scaffold might serve as a new way to keep the differentiation of MSCs for enhancing cartilage repair.