Osteoarthritis is a common disease in humans, which is caused by progressive degradation of articular cartilage and imbalance of extracellular matrix turnover. It usually causes pain and malfunction of the affected joints, and the incidence of this disease increases with aging. Classical treatment for osteoarthritis is pain alleviation and, in progressed disease, surgical operations. New surgical techniques include transplantation of autologous chondrocytes or osteochondral plugs to the lesion area. However, these techniques have the problem of limited cell and tissue sources available for transplantation. Therefore, cartilage engineering and use of mesenchymal stem cells have raised a lot of interest as therapeutic approaches. Various strategies are being tested for their ability to provide tissue constructs that could be used as a replacement for the damaged cartilage. Growth factors, cytokines and mechanical forces are known to direct chondrogenesis and the maintenance of chondrocytic phenotype, although the cellular signaling events involved are often poorly known. Yet, understanding of the signal transduction mechanisms involved in chondrogenesis and cartilage tissue engineering will be very important, especially to learn how to guide stem cells into the desired differentiation path. This review aims to summarize the known signal transduction pathways involved with osteoarthritis, cartilage mechanobiology and differentiation of mesenchymal stem cells to chondrocytes.