Background: In this study, we investigated the in vitro and in vivo chondrogenic capacity of kartogenin (KGN)-enhanced bone marrow-derived mesenchymal stem cells (BMSCs) for cartilage regeneration. Purpose: To determine (1) whether functionalized nanographene oxide (NGO) can effectively deliver KGN into BMSCs and (2) whether KGN would enhance BMSCs during chondrogenesis in vitro and in vivo in an animal model. Study design: Controlled laboratory study. Methods: Functionalized NGO with line chain amine-terminated polyethylene glycol (PEG) and branched polyethylenimine (BPEI) were used to synthesize biocompatible NGO-PEG-BPEI (PPG) and for loading hydrophobic KGN molecules noncovalently via π-π stacking and hydrophobic interactions (PPG-KGN). Then, PPG-KGN was used for the intracellular delivery of hydrophobic KGN by simple mixing and co-incubation with BMSCs to acquire KGN-enhanced BMSCs. The chondrogenic efficacy of KGN-enhanced BMSCs was evaluated in vitro. In vivo, osteoarthritis (OA) was induced by anterior cruciate ligament transection in rats. A total of 5 groups were established: normal (OA treated with nothing), phosphate-buffered saline (PBS; intra-articular injection of PBS), PPG-KGN (intra-articular injection of PPG-KGN), BMSCs (intra-articular injection of BMSCs), and BMSCs + PPG-KGN (intra-articular injection of PPG-KGN-preconditioned BMSCs). At 6 and 9 weeks after the surgical induction of OA, the rats received intra-articular injections of PPG-KGN, BMSCs, or KGN-enhanced BMSCs. At 14 weeks after the surgical induction of OA, radiographic and behavioral evaluations as well as histological analysis of the knee joints were performed. Results: The in vitro study showed that PPG could be rapidly uptaken in the first 4 hours after incubation, reaching saturation at 12 hours and accumulating in the lysosome and cytoplasm of BMSCs. Thus, PPG-KGN could enhance the efficiency of the intracellular delivery of KGN, which showed a remarkably high chondrogenic differentiation capacity of BMSCs. When applied to an OA model of cartilage injuries in rats, PPG-KGN-preconditioned BMSCs contributed to protection from joint space narrowing, pathological mineralization, OA development, and OA-induced pain, as well as improved tissue regeneration, as evidenced by radiographic, weightbearing, and histological findings. Conclusion: Our results demonstrate that KGN-enhanced BMSCs showed markedly improved capacities for chondrogenesis and articular cartilage repair. We believe that this work demonstrates that a multifunctional nanoparticle-based drug delivery system could be beneficial for stem cell therapy. Our results present an opportunity to reverse the symptoms and pathophysiology of OA. Clinical relevance: The intracellular delivery of KGN to produce BMSCs with enhanced chondrogenic potential may offer a new approach for the treatment of OA.Keywords: intracellular drug delivery; kartogenin; multifunctional nanographene oxide; osteoarthritis; stem cell therapy.