Cartilage plays a vital role in joint function by providing chondrocytes within a dense extracellular matrix, allowing for smooth and durable movement. To replicate the complex properties of cartilage and properly regulate cell behavior, it is essential to engineer tissue constructs with precise design. In recent research, approaches using cell spheroids and hydrogel matrices have advanced cartilage tissue engineering, with particular attention on mesenchymal stem cell condensation and the local microenvironment during chondrogenesis. Here, semi-interpenetrating hydrogel consisting of hexanoyl glycol chitosan and gelatin methacryloyl with embedding stem cell spheroids was fabricated to recapitulate mesenchymal condensation process during cartilage development and cartilage microenvironment. The hydrogel provided an environment that prevented excessive spheroid sprouting while enhancing chondrogenesis and inhibiting hypertrophy, which is ideal for in vitro engineered 3D cartilage.