Human adipose derived adult stem (hADAS) cells have the ability to differentiate into a chondrogenic phenotype in three-dimensional culture and media containing dexamethasone and TGF-beta. The current study examined the potential of a genetically engineered elastin-like polypeptide (ELP) to promote the chondrocytic differentiation of hADAS cells without exogenous chondrogenic supplements. hADAS cells were cultured in ELP hydrogels in either chondrogenic or standard medium at 5% O2 for up to 2 weeks. By day 14, constructs cultured in either medium exhibited significant increases in sulfated glycosaminoglycan (up to 100%) and collagen contents (up to 420%). Immunolabeling confirmed that the matrix formed consisted mainly of type II and not type I collagen. The composition of the constructs cultured in either medium did not differ significantly. To assess the effect of oxygen tension on the differentiation of the above constructs, samples were cultured in standard medium at either 5% or 20% O2 for 7 days and their gene expression profile was evaluated using real time RT-PCR. In both cases, the hADAS-ELP constructs upregulated SOX9 and type II collagen gene expression, while type I collagen was downregulated. However, constructs cultured in 20% O2 highly upregulated type X collagen, which was not detected in the 5% O2 cultures. The study suggests that ELP can promote chondrogenesis for hADAS cells in the absence of exogenous TGF-beta1 and dexamethasone, especially under low oxygen tension conditions.