ABSTRACT Costal chondrocytes (CCs) are promising alternatives to articular chondrocytes (ACs) when selecting donor cells for cartilage tissue engineering. However, their clinical utility is hindered by an inherent tendency toward hypertrophic differentiation and subsequent calcification. RNA sequencing identifies leucine‐rich repeat‐containing protein 15 (LRRC15) as a novel regulator of hypertrophic differentiation in CCs. CCs in which LRRC15 is silenced (shLRRC15@CCs) significantly enhance cartilage matrix synthesis and suppress the expression of hypertrophic markers in vitro. Notably, shLRRC15@CCs pellets maintain a stable chondrogenic phenotype under IL‐1β‐induced inflammatory conditions and promote robust cartilage regeneration in a rat defect model. To enhance clinical translatability, shLRRC15@CCs are encapsulated within an injectable thermosensitive poly(d,l‐lactide)‐poly(ethylene glycol)‐poly(d,l‐lactide) (PLEL) hydrogel (PLEL@shLRRC15‐CCs), enabling minimally invasive delivery and sustained cell retention at defect sites. Transcriptome profiling reveals the mechanism by which LRRC15 knockdown attenuates AP‐1 transcriptional activity. Collectively, FOS expression is downregulated, thus disrupting assembly of the AP‐1 complex. Collectively, these findings demonstrate that PLEL@shLRRC15‐CCs constitute a synergistic cell‐hydrogel therapy with two advantages: intrinsic anti‐hypertrophic properties and an injectable gelation capacity. Both advantages support minimally invasive cartilage repair.