- Subchondral defect repair is a multitask challenge requiring the simultaneous regeneration of cartilage and bone. Herein, we describe the features of a hydrogel system designed to simultaneously induce the endogenous regeneration of hyaline cartilage and subchondral bone. The system was constructed as two layers, spatially presenting the chondroinductive transforming growth factor-β1 (TGF-β1) in one layer and the osteoinductive bone morphogenetic protein-4 (BMP-4) in a second layer, via affinity binding to the matrix. Human mesenchymal stem cells seeded in the bilayer system differentiated into chondrocytes and osteoblasts in the respective layers, confirming the spatial presentation and prolonged activity of TGF-β1 and BMP-4. Administration of the bilayer system with affinity-bound TGF-β1 and BMP-4 (with no cells) into a subchondral defect in rabbits induced endogenous regeneration of articular cartilage and the subchondral bone underneath within 4 weeks. Cartilage extracellular matrix proteoglycans were found in the top layer, with no mineralization, whereas the layer underneath consisted of newly formed woven bone. The results indicate that stem cells migrating into the defect are able to sense the biological cues spatially presented in the hydrogel and respond by differentiation into the appropriate cell lineage. The strategy has a real translational potential for repairing osteochondral defects in humans as it is acellular and can be implanted via a minimally invasive method.