Bone marrow contains skeletal progenitor cells (mesenchymal stem cells) which are important actors in skeletal repair. Nevertheless the therapeutic use of mesenchymal stem cells for articular cartilage repair remains a challenge with a limited efficacy on both clinical outcomes and cartilage regeneration. In rabbit periosteal graft models we show that such skeletal progenitor cells are recruited and undergo differentiation through different skeletal tissue pathways (bone, cartilage, skeletal muscle) in bone marrow areas that are under periosteal graft influence. Moreover histological observations show among cartilage differentiated cells two different cartilage pathways, corresponding respectively to articular cartilage formations and to endochondral cartilage formations. This underline the presence in bone marrow of cartilage progenitor cells that escape from the intrinsic endochondral differentiation program resulting in transient rather than permanent cartilage, and follow a specific articular cartilage differentiation pathway. With respect to tissue engineering, and while extremely complex techniques are being developed to artificially generate functionally integrated, stratified articular cartilage like structures, our observations urge the development of protocols that select the proper population of articular cartilage progenitor cells before its use as cartilage building units.