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Mesenchymal stromal cells (MSCs) have emerged as potential candidates for cartilage regeneration. However, MSCs exhibit hypertrophic differentiation, and their chondrogenic ability is reduced in an inflammatory environment. In recent years, genetic modification has been proposed for optimizing MSC-based therapies, some of which are expected to enter clinical trials. This review summarizes recent research findings and developments in genetic engineering strategies to enhance stem cell-based therapy for cartilage regeneration. We also discuss the mechanisms of biofunctions of MSCs in cartilage regeneration and outline the efficacy and safety of the different genetic modification strategies, including viral and nonviral delivery transduction. 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