Tissue-specific stem cells found in adult tissues can participate in the repair process following injury. However, adult tissues, such as articular cartilage and intervertebral disc, have low regeneration capacity, whereas fetal tissues, such as articular cartilage, show high regeneration ability. The presence of fetal stem cells in fetal cartilaginous tissues and their involvement in the regeneration of fetal cartilage is unknown. The aim of the study was to assess the chondrogenic differentiation and the plasticity of fetal cartilaginous cells. We compared the TGF-β3-induced chondrogenic differentiation of human fetal cells isolated from spine and cartilage tissues to that of human bone marrow stromal cells (BMSC). Stem cell surface markers and adipogenic and osteogenic plasticity of the two fetal cell types were also assessed. TGF-β3 stimulation of fetal cells cultured in high cell density led to the production of aggrecan, type I and II collagens, and variable levels of type X collagen. Although fetal cells showed the same pattern of surface stem cell markers as BMSCs, both type of fetal cells had lower adipogenic and osteogenic differentiation capacity than BMSCs. Fetal cells from femoral head showed higher adipogenic differentiation than fetal cells from spine. These results show that fetal cells are already differentiated cells and may be a good compromise between stem cells and adult tissue cells for a cell-based therapy.