- Osteochondral defects (OCDs) are conditions affecting both cartilage and the underlying bone. Since cartilage is not spontaneously regenerated, our group has recently developed a strategy of injecting bioactive alginate hydrogel into the defect for promoting endogenous regeneration of cartilage via presentation of affinity‐bound transforming growth factor β1 (TGF‐β1). As in vivo model systems often provide only limited insights regarding the mechanism behind regeneration processes, here we describe a novel flow bioreactor for the in vitro modeling of the OCD microenvironment, designed to promote cell recruitment from the simulated bone marrow compartment into the hydrogel, under physiological flow conditions. Computational Fluid Dynamics modeling confirmed that the bioreactor operates in a relevant slow‐flowing regime. Using a chemotaxis assay, it was shown that TGF‐β1 does not affect human mesenchymal stem cell (MSC) chemotaxis in 2D culture. Accessible through live imaging, the bioreactor enabled monitoring and discrimination between erosion rates and profiles of different alginate hydrogel compositions, using GFP‐expressing cells. Mathematical modeling of the erosion front progress kinetics predicted the erosion rate in the bioreactor up to 7 days post operation. Using quantitative real‐time PCR (qPCR) of early chondrogenic markers, the onset of chondrogenic differentiation in hMSCs was detected after 7 days in the bioreactor. In conclusion, the designed bioreactor presents multiple attributes, making it an optimal device for mechanistical studies, serving as an investigational tool for the screening of other biomaterial‐based, tissue engineering strategies.