Osteoarthritis is a degenerative joint disease characterized by pain and disability. It involves all ages and 70% of people aged >65 have some degree of osteoarthritis. Natural cartilage repair is limited because chondrocyte density and metabolism are low and cartilage has no blood supply. The results of joint-preserving treatment protocols such as debridement, mosaicplasty, perichondrium transplantation and autologous chondrocyte implantation vary largely and the average long-term result is unsatisfactory. One reason for limited clinical success is that most treatments require new cartilage to be formed at the site of a defect. However, the mechanical conditions at such sites are unfavorable for repair of the original damaged cartilage. Therefore, it is unlikely that healthy cartilage would form at these locations. The most promising method to circumvent this problem is to engineer mechanically stable cartilage ex vivo and to implant that into the damaged tissue area. This review outlines the issues related to the composition and functionality of tissue-engineered cartilage. In particular, the focus will be on the parameters cell source, signaling molecules, scaffolds and mechanical stimulation. In addition, the current status of tissue engineering of cartilage will be discussed, with the focus on extracellular matrix content, structure and its functionality.