Periosteal grafts have been used to repair large osteochondral defects in rabbit articular cartilage but early degeneration of the new cartilage has hindered extensive clinical application of this procedure. The effect of TGF-βintroduced either by pre-incubation of the periosteum in vitro or by intraarticular injection in vivo was compared to determine the relative effects of these two methods on the generation of new cartilage.Sixty-four rabbits were divided into five groups: 1. non-grafted group; 2. grafted group; 3. 100ng/ml rhTGF-β1 pre-incubation group; 4. grafted and 100ng/100μl rhTGF-β1 injected group; 5. grafted and 200ng/100μl rhTGF-β1 injected group. The rabbits were sacificed at 2 to 12 weeks, and specimens taken for histological examination sections were stained with Safranin O and were scored basing on a new subjective scoring system. Results showed that the grafted group healed with hyaline cartilage-like material formed to its utmost at 4 weeks, but soon followed with progressive thinning; the rhTGF-β1 incubated group did accelerated chondrogenesis but also accelerated degeneration. The rhTGF-β1 injected groups did not enhance chondrogenesis but generated osteophytes instead. While the non-grafted group healed without any cartilaginous material. The rhTGF-β1 pre-incubation in vitro is preferred over intra-articular injection as the route of administering this polypeptide growth factor and is effective in accelerating chondrogenesis, but the problem of early degeneration of new cartilage necessitates further study.