Background Synovium-derived stem cells (SDSCs) with higher chondrogenic potential are attracting considerable attention as a cell source for cartilage regeneration. We investigated the effect of bone morphogenetic protein 2 (BMP-2) on transforming growth factor beta3 (TGF-β3)-induced chondrogenesis of SDSCs isolated from human osteoarthritic synovium in a pellet culture system. Methods The clonogenicity, stem cell marker expression and multi-differentiation potential of isolated SDSCs were determined by colony forming unit assay, flow cytometry and specific staining including alizarin red S, Oil red O and alcian blue staining, respectively. SDSCs pellet was cultured in chondrogenic medium with or without TGF-β3 or/and BMP-2. At day 21, the diameter and the weight of the pellets were measured. Chondrogenic differentiation of SDSCs was evaluated by Safranin O staining, immunohistochemical staining of collagen type Ⅱ, sulfated glycosaminoglycan (sGAG) synthesis and mRNA expression of collagen type Ⅱ, aggrecan, SOX9, link-protein, collagen type X and BMP receptor Ⅱ. Results Cells isolated under the optimized culturing density (104/60 cm2) showed clonogenicity and multi-differentiation potential. These cells were positive (＞99％) for CD44, CD90, CD105 and negative (＜10％) for CD34 and CD71. SDSCs differentiated to a chondrocytic phenotype in chondrogenic medium containing TGF-β3 with or without BMP-2. Safranin O staining of the extracellular matrix was positive and the expression of collagen type Ⅱ was detected. Cell pellets treated with TGF-β3 and BMP-2 were larger in diameter and weight, produced more sGAGs, and expressed higher levels of collagen type Ⅱ and other chondrogenic markers, except COL10A1, than medium with TGF-β3 alone. Conclusions SDSCs could be isolated from human osteoarthritic synovium. Supplementation with BMP-2 significantly promoted the in vitro TGF-β3-induced chondrogenic differentiation of SDSCs.