The objective of this study was to examine the effects of cyclic compressive loading on chondrogenic differentiation of rabbit bone‐marrow mesenchymal stem cells (BM‐MSCs) in agarose cultures. Rabbit BM‐MSCs were obtained from the tibias and femurs of New Zealand white rabbits. After the chondrogenic potential of BM‐MSCs was verified by pellet cultures, cell‐agarose constructs were made by suspending BM‐MSCs in 2% agarose (10⁷ cells/ml) for a cyclic, unconfined compression test performed in a custom‐made bioreactor. Specimens were divided into four groups:​ control;​ transforming growth factor (TGF‐β) (with TGF‐β1 treatment);​ loading (with stimulation of cyclic, unconfined compressive loading);​ and TGF‐β loading (with TGF‐β1 treatment and loading stimulation) groups. In the loading experiment, specimens were subjected to sinusoidal loading with a 10% strain magnitude at a frequency of 1 Hz for 4 hours a day. Experiments were conducted for 3, 7, and 14 consecutive days. While the experimental groups (TGF‐β, loading, and TGF‐β loading) exhibited significantly higher levels of expressions of chondrogenic markers (collagen II and aggrecan) at three time periods, there were no differences among the experimental groups after an extra 5‐day culture. This suggests that compressive loading alone induces chondrogenic differentiation of rabbit BM‐MSCs as effectively as TGF‐β or TGF‐β plus loading treatment. Moreover, both the compressive loading and the TGF‐β1 treatment were found to promote the TGF‐β1 gene expression of rabbit BM‐MSCs. These findings suggest that cyclic compressive loading can promote the chondrogenesis of rabbit BM‐MSCs by inducing the synthesis of TGF‐β1, which can stimulate the BM‐MSCs to differentiate into chondrocytes.