Although most in vitro studies indicate that transforming growth factor β3 (TGF-β3) immobilized scaffold is suitable for cartilage tissue engineering, in vivo studies of implanting immobilized scaffold for chondral defect repair are still lacking. This study is to evaluate the potentials of TGF-β3 immobilized poly-(lactic-co-glycolic acid)-gelatin/chondroitin sulfate/hyaluronic acid (PLGA-GCH) hybrid scaffold for cartilage regeneration. The scaffold was fabricated by incorporating GCH micro-sponges into PLGA frameworks and then crosslinked with TGF-β3 to mimic natural cartilaginous extra cellular matrix (ECM). In vitro study demonstrated that MSCs proliferated vigorously and produced abundant ECM on scaffold. The immunohistochemistry staining and alcian blue staining confirmed the cartilaginous ECM production. The chondrogenic differentiation of MSCs on scaffold was proved by the expression of collagen II gene in mRNA and protein level. Then MSCs/TGF-β3 immobilized scaffolds were implanted in rabbits for chondral defects repair. After eight weeks, histological observation showed that differentiated MSCs were located in lacunae within the metachromatic staining matrix and exhibited typical chondrocyte morphology. Histological grading scores also indicated the congruent cartilage was regenerated. In conclusion, the TGF-β3 immobilized PLGA-GCH hybrid scaffold has great potential in constructing the tissue-engineered cartilage.