Umbilical cord Wharton’s jelly-derived mesenchymal stem cell (WJMSC) is a new-found mesenchymal stem cell in recent years with multiple lineage potential. Due to its abundant resources, no damage procurement, and lower immunogenicity than other adult MSCs, WJMSC promises to be a good xenogenous cell candidate for tissue engineering. This in vivo pilot study explored the use of human umbilical cord Wharton’s jelly mesenchymal stem cells (hWJMSCs) containing a tissue engineering construct xenotransplant in rabbits to repair full-thickness cartilage defects in the femoral patellar groove. We observed orderly spatial-temporal remodeling of hWJMSCs into cartilage tissues during repair over 16 months, with characteristic architectural features, including a hyaline-like neocartilage layer with good surface regularity, complete integration with adjacent host cartilage, and regenerated subchondral bone. No immune rejection was detected when xenograft hWJMSCs were implanted into rabbit cartilage defects. The repair results using hWJMSCs were superior to those of chondrogenically induced hWJMSCs after assessing gross appearance and histological grading scores. These preliminary results suggest that using novel undifferentiated hWJMSCs as seed cells might be a better approach than using transforming growth factor-β-induced differentiated hWJMSCs for in vivo tissue engineering treatment of cartilage defects. hWJMSC allografts may be promising for clinical applications.