This in vitro study investigated the metabolism of human osteoarthritic (OA) chondrocytes encapsulated in a spherical matrix enriched of chitosan. Human OA chondrocytes were encapsulated and cultured for 28 days either in chitosan-alginate beads or in alginate beads. The beads were formed by slowly passing dropwise either the chitosan 0.6%-alginate 1.2% or the alginate 1.2% solution through a syringe into a 102 mM CaCl2 solution. Beads were analyzed histologically after 28 days. Interleukin (IL)-6 and -8, prostaglandin (PG) E2, matrix metalloproteinases (MMPs), hyaluronan and aggrecan were quantified directly in the culture supernatant by specific ELISA and nitric oxide (NO) by using a colorimetric method based on the Griess reaction. Hematoxylin and eosin staining showed that chitosan was homogeneously distributed through the matrix and was in direct contact with chondrocytes. The production of IL-6, IL-8 and MMP-3 by chondrocytes significantly decreased in chitosan-alginate beads compared to alginate beads. PGE2 and NO decreased also significantly but only during the first three days of culture. Hyaluronan and aggrecan production tended to increase in chitosan-alginate beads after 28 days of culture. Chitosan-alginate beads reduced the production of inflammatory and catabolic mediators by OA chondrocytes and tended to stimulate the synthesis of cartilage matrix components. These particular effects indicate that chitosan-alginate beads are an interesting scaffold for chondrocytes encapsulation before transplantation to repair cartilage defects.