The integration of regenerated cartilage with surrounding native cartilage is a major challenge for the success of cartilage tissue-engineering strategies. The purpose of this study is to investigate whether incorporation of the power of mesenchymal stem cell (MSC) sheet to MSCs-loaded bilayer poly-(lactic-co-glycolic acid) (PLGA) scaffolds can improve the integration and repair of cartilage defects in a rabbit model. Rabbit bone marrow-derived MSCs were cultured and formed cell sheet. Full-thickness cylindrical osteochondral defects (4 mm in diameter, 3 mm in depth) were created in the patellar groove of 18 New Zealand white rabbits and the osteochondral defects were treated with PLGA scaffold (n = 6), PLGA/MSCs (n = 6) or MSC sheet-encapsulated PLGA/MSCs (n = 6). After 6 and 12 weeks, the integration and tissue response were evaluated histologically. The MSC sheet-encapsulated PLGA/MCSs group showed significantly more amounts of hyaline cartilage and higher histological scores than PLGA/MSCs group and PLGA group (P < 0.05). In addition, the MSC sheet-encapsulated PLGA/MCSs group showed the best integration between the repaired cartilage and surrounding normal cartilage and subchondral bone compared to other two groups. The novel method of incorporation of MSC sheet to PLGA/MCSs could enhance the ability of cartilage regeneration and integration between repair cartilage and the surrounding cartilage. Transplantation of autologous MSC sheet combined with traditional strategies or cartilage debris might provide therapeutic opportunities for improving cartilage regeneration and integration in humans.