Current regenerative cartilage therapies are associated with several drawbacks such as dedifferentiation of chondrocytes during expansion and the formation of fibrocartilage. Optimized chondrocyte expansion and tissue formation could lead to better clinical results of these therapies. In this study, a novel chondrocyte suspension expansion protocol that includes the addition of porcine notochordal cell-derived matrix was used to self-assemble human chondrocytes from osteoarthritic (OA) and nondegenerate (ND) origin into cartilage organoids containing collagen type II and proteoglycans. Proliferation rate and viability were similar for OA and ND chondrocytes and organoids formed had a similar histologic appearance and gene expression profile. Organoids were then encapsulated in viscoelastic alginate hydrogels to form larger tissues. Chondrocytes on the outer bounds of the organoids produced a proteoglycan-rich matrix to bridge the space between organoids. In hydrogels containing ND organoids some collagen type I was observed between the organoids. Surrounding the bulk of organoids in the center of the gels, in both OA and ND gels a continuous tissue containing cells, proteoglycans and collagen type II had been produced. No difference was observed in sulphated glycosaminoglycan and hydroxyproline content between gels containing organoids from OA or ND origin after 28 days. It was concluded that OA chondrocytes, which can be harvested from leftover surgery tissue, perform similar to ND chondrocytes in terms of human cartilage organoid formation and matrix production in alginate gels. This opens possibilities for their potential to serve as a platform for cartilage regeneration but also as an in vitro model to study pathways, pathology, or drug development.