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Tissue microenvironment plays a critical role in guiding local stem cell differentiation. Within the intervertebral disc, collagen type II and nucleus pulposus (NP) cells are two major components. This study aimed to investigate how collagen type II and NP cells affect adipose tissue-derived stem cells (ASCs) in a 3D environment. ASCs were cultured in collagen type I or type II hydrogels alone, or co-cultured in transwells with micromass NP cells for 4 and 14 days. ASCs seeded in collagen type II gels acquired dentritic cell shapes, and orchestrated cell density-dependent gel contraction rates. Up-regulation of collagen type X, but not of other chondrogenic markers was observed at day 4, irrespective of the hydrogel type. Strikingly, in co-cultures with NP cells, more pronounced differentiation of ASCs along the cartilaginous lineage was observed (up-regulation of collagen IIA, IIB and aggrecan gene expression, as well as stronger alcian blue staining), when ASCs were embedded in collagen type II in comparison with type I hydrogels. Interestingly, strong cellular condensations/aggregations were observed in ASC-seeded type II, but not type I gels, and this aggregation was markedly delayed when the same gels were co-cultured with NP cells. The NP cell-mediated inhibition of ASC aggregation in collagen type II gels coincided with down-regulation of integrin subunit α2 gene expression. We conclude that soluble factors released by NP cells can direct chondrogenic differentiation of ASCs in collagen hydrogels, and that combination with a nucleus-mimicking collagen type II microenvironment enhances differentiation towards a more pronounced cartilage/NP lineage relative to collagen type I hydrogels.