Background Damaged articular cartilage has very limited capacity for spontaneous healing. Tissue engineering provides a new hope for functional cartilage repair. Creation of an appropriate cell carrier is one of the critical steps for successful tissue engineering. With the supposition that a biomimetic construct might promise to generate better effects, we developed a novel composite scaffold and investigated its potential for cartilage tissue engineering. Methods Chitosan of 88% deacetylation was prepared via a modified base reaction procedure. A freeze-drying process was employed to fabricate a three-dimensional composite scaffold consisting of chitosan and type Ⅱcollagen. The scaffold was treated with 1-ethyl-3-(3-dimethylaminopropyl) carbodiimide and N-hydroxysuccinimide. Ultrastructure and tensile strength of the matrix were carried out to assess its physico-chemical properties. After subcutaneous implantation in rabbits, its in vivo biocompatibility and degradability of the scaffold were determined. Its capacity to sustain chondrocyte growth and biosynthesis was evaluated through cell-scaffold co-culture in vitro. Results The fabricated composite matrix was porous and sponge-like with interconnected pores measuring from 100-250 μm in diameter. After cross-linking, the scaffold displayed enhanced tensile strength. Subcutaneous implantation results indicated the composite matrix was biocompatible and biodegradable. In intro cell-scaffold culture showed the scaffold sustained chondrocyte proliferation and differentiation, and maintained the spheric chondrocytic phenotype. As indicated by immunohistochemical staining, the chondrocytes synthesized type Ⅱ collagen. Conclusions Chitosan and type Ⅱ collagen can be well blended and developed into a porous 3-D biomimetic matrix. Results of physico-chemical and biological tests suggest the composite matrix satisfies the constraints specified for a tissue-engineered construct and may be used as a chondrocyte carrier for cartilage tissue engineering.