Adipose-derived stem cells (ASCs) have captured growing interests for cartilage regeneration. Although ASCs chondrogenesis can be stimulated by genetic modification, whether genetically engineered ASCs hold promise for the cartilaginous tissue formation remains to be explored. Since baculovirus (an emerging gene delivery vector) effectively transduced ASCs and transforming growth factor β3 (TGF-β3) was recently shown to induce ASCs chondrogenesis more potently than TGF-β1, we constructed a baculoviral vector (Bac-CT3W) to encode TGF-β3. The Bac-CT3W-transduced ASCs expressed TGF-β3 robustly and substantiated the chondrogenesis of ASCs cultured in monolayer and in porous scaffolds. Culture of the transduced cell/scaffold constructs in the rotating-shaft bioreactor (RSB) under hypoxic and perfusion conditions for 2 weeks further augmented the ASCs chondrogenesis and deposition of cartilage-specific collagen II and glycosaminoglycans, leading to the formation of cartilage-like tissues with hyaline appearance and compressive modulus approaching 62% of the native articular cartilage. Intriguingly, prolonged culture to 3 or 4 weeks failed to further augment the construct growth, probably due to the scaffold degradation. Altogether, baculovirus-mediated TGF-β3 expression in ASCs in conjunction with dynamic culture in the RSB for 2 weeks synergistically ameliorated the ASCs chondrogenesis and formation of cartilaginous tissues, representing a novel approach to producing engineered cartilages.