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Cartilage has poor regenerative capacity. Donor site morbidity and interference with joint homeostasis should be considered when applying the autologous chondrocyte transplantation technique. The use of ectopically produced cartilage, derived from periosteum, might be a novel method to heal cartilage defects. Ectopic cartilage was produced by dissecting a piece of periosteum from the tibia of rabbits. After 14 days the reactive tissue at the dissection site was harvested and a graft was cored out and press-fit implanted in an osteochondral defect in the medial condyle of the femur with or without addition of hyaluronan. After 3 weeks and 3 months the repair reaction was evaluated by histology. Thionine- and collagen type II-stained sections were evaluated for graft viability, ingrowth of the graft, and joint surface repair. Empty defects remained empty 3 weeks after implantation, ectopic cartilage filled the defect to the level of the surrounding cartilage. Histologically, the grafts were viable, consisting mainly of cartilage, and showed a variable pattern of ingrowth. Three months after implantation empty defects with or without hyaluronan were filled primarily with fibrocartilaginous tissue. Defects treated with ectopic cartilage contained mixtures of fibrocartilaginous and hyaline cartilage. Sometimes a tidemark was observed in the new articular cartilage and the orientation of the cells resembled that of healthy articular cartilage. Subchondral bone repair was excellent. The modified O'Driscoll scores for empty defects without and with hyaluronan were 12.7 ± 6.4 and 15.3 ± 3.2; for treated defects scores were better (15.4 ± 3.9 and 18.2 ± 2.9). In this conceptual study the use of ectopic cartilage derived from periosteum appears to be a promising novel method for joint surface repair in rabbits.