Multipotential processed lipoaspirate (PLA) cells extracted from five human infrapatellar fat pads and embedded into fibrin glue nodules, were induced into the chondrogenic phenotype using chondrogenic media. The remaining cells were placed in osteogenic media and were transfected with an adenovirus carrying the cDNA for bone morphogenetic protein-2 (BMP-2). We evaluated the tissue-engineered cartilage and bone using in vitro techniques and by placing cells into the hind legs of five severe combined immunodeficient mice. After six weeks, radiological and histological analysis indicated that the PLA cells induced into the chondrogenic phenotype had the histological appearance of hyaline cartilage. Cells transfected with the BMP-2 gene media produced abundant bone, which was beginning to establish a marrow cavity. Tissue-engineered cartilage and bone from infrapatellar fat pads may prove to be useful for the treatment of osteochondral defects.