Articular cartilage repair remains a clinical and scientific challenge with increasing interest focused on the transplantation of chondrogenic cells. This study evaluated the repair response during a 1-year period after implantation of allogenic perichondrium cell polylactic acid composite grafts into 3.7 x 5 mm osteochondral defects drilled into the medial femoral condyles of 82 adult New Zealand White rabbits. The repair tissue was evaluated grossly, histologically, histomorphometrically, biochemically, and biomechanically at 6 weeks, 12 weeks, 6 months, and 1 year after implantation. After gross evaluation, cartilaginous material appeared to fill the defect in 70 experimental knees, for an overall repair frequency of 85%. The histomorphometric results and the histologic appearances were variable. None of the specimens were completely normal at 1 year. Only specimens with subchondral bone reformation displayed a definable cartilage appearing surface with chondrocytes surrounded by dense matrix. Subchondral bone reformation was inconsistent, reaching 50% at 1 year. Biochemically, the repair tissue matured during a 1-year period into a hyaline Type II collagen dominant tissue, whereas glycosaminoglycan content remained low at all time periods. The measured compressive properties of the repair tissue at 1 year were not significantly different from those of the contralateral knee that was not surgically treated. The treatment of osteochondral defects in the rabbit knee with allogenic perichondrium cell polylactic acid composite grafts yielded a high percentage of grossly successful repairs that showed inconsistent subchondral bone reformation. These results suggest that healthy subchondral bone is important to articular cartilage repair. They also highlight that a cartilaginous appearing tissue at gross inspection may not represent structurally normal articular cartilage. Continued multidisciplinary studies on the arthroplastic potential of rib perichondrial cells are needed before human studies, which rarely can extend beyond gross assessment of repair tissue appearance can be undertaken.