In this study, we first used gelatin/chondroitin-6-sulfate/hyaluronan/chitosan highly elastic cryogels, which showed total recovery from large strains during repeated compression cycles, as 3D scaffolds to study the effects of cyclic dynamic compressive loading on chondrocyte gene expression and extracellular matrix (ECM) production. Dynamic culture of porcine chondrocytes was studied at 1 Hz, 10% to 40% strain and 1 to 9 h/day stimulation duration, in a mechanical-driven multi-chamber bioreactor for 14 days. From the experimental results, we could identify the optimum dynamic culture condition (20% and 3 h/day) to enhance the chondrocytic phenotype of chondrocytes from the expression of marker (Col I, Col II, Col X, TNF-α, TGF-β1 and IGF-1) genes by quantitative real-time polymerase chain reactions (qRT-PCR) and production of ECM (GAGs and Col II) by biochemical analysis and immunofluorescence staining. With up-regulated growth factor (TGF-β1 and IGF-1) genes, co-culture of chondrocytes with porcine adipose-derived stem cells (ASCs) was employed to facilitate chondrogenic differentiation of ASCs during dynamic culture in cryogel scaffolds. By replacing half of the chondrocytes with ASCs during co-culture, we could obtain similar production of ECM (GAGs and Col II) and expression of Col II, but reduced expression of Col I, Col X and TNF-α. Subcutaneous implantation of cells/scaffold constructs in nude mice after mono-culture (chondrocytes or ASCs) or co-culture (chondrocytes + ASCs) and subject to static or dynamic culture condition in vitro for 14 days was tested for tissue-engineering applications. The constructs were retrieved 8 weeks post-implantation for histological analysis by Alcian blue, Safranin O and Col II immunohistochemical staining. The most abundant ectopic cartilage tissue was found for the chondrocytes and chondrocytes + ASCs groups using dynamic culture, which showed similar neo-cartilage formation capability with half of the chondrocytes replaced by ASCs for co-culture. This combined co-culture/dynamic culture strategy is expected to cut down the amount of donor chondrocytes needed for cartilage-tissue engineering.