To deliver and retain viable repair cells in a surgically prepared cartilage lesion, we previously developed an adhesive in situ-gelling cell carrier by suspending cells in a solution of hydroxyethyl cellulose (HEC), which was then mixed with chitosan-glycerol phosphate to form a chitosan-GP/HEC gel. The purpose of this study was to elucidate the mechanism of gelation to maximally control gel time and viability of encapsulated cells. We analyzed the role of osmolality, pH, gelation temperature, gel shrinkage, and HEC. A chitosan-GP solution at pH 6.8 with cytocompatible osmotic pressure (419 mOsm/kg) was achieved by lowering disodium GP concentration from 370 to 135 mM. This solution was still thermogelling but only at 73 degrees C. We next discovered that glyoxal, a common additive in ether cellulose manufacturing, was responsible for chitosan gelation. Monolayer cells survived and proliferated in up to 1 mM of glyoxal, however only a very narrow range of glyoxal concentration in chitosan-GP/HEC, 0.1-0.15 mM, permitted gel formation, cell survival, and cell proliferation. Chitosan gels containing HEC required slightly less glyoxal to solidify. Chitosan-GP/HEC loaded with viable chondrocytes formed an adhesive seal with ex vivo mosaic arthroplasty defects from sheep knee joints. In mosaic arthroplasty defects of live sheep, bleeding occurred beneath part of the hydrogel carrier, and the gel was cleared after 1 month in vivo. These data indicate that chitosan-GP/HEC is suitable as an adhesive and injectable delivery vehicle for clinical orthopedic applications involving single use treatments that guide acute cartilage repair processes.