Articular chondrocytes are often expanded in vitro and then used to assist in healing articular cartilage defects. We investigated the extent of dedifferentiation in monolayer-passaged, zonal articular chondrocytes by using quantitative, real-time PCR. The relative gene expressions for collagen type I and II, aggrecan, and superficial zone protein were analyzed for relevant passage numbers (P0–P4) to determine how the expansion of chondrocytes affects the expression of cartilage extracellular matrix proteins. Results reveal that dramatic changes occur as early as first passage. Furthermore, these changes are shown to persist even when the expanded cells are encapsulated in 3D, alginate beads. Successful tissue engineering and autologous cell transplantation procedures rely heavily on having a cell source that expresses the chondrocytic phenotype. The results of this study suggest that major problems exist at the front-end of cartilage regeneration efforts.