There are a variety of exciting hydrogel technologies being explored for cartilage regenerative medicine. Our overall goal is to explore whether using stem cells in an aggregate form may be advantageous in these applications. 3D stem cell aggregates hold great promise as they may recapitulate the in vivo skeletal tissue condensation, a property that is not typically observed in 2D culture. We considered two different stem cell sources, human umbilical cord Wharton's jelly cells (hWJCs, currently being used in clinical trials) and rat bone marrow-derived mesenchymal stem cells (rBMSCs). The objective of the current study was to compare the influence of cell phenotype, aggregate size, and aggregate number on chondrogenic differentiation in a generic hydrogel (agarose) platform. Despite being differing cell sources, both rBMSC and hWJC aggregates were consistent in outperforming cell suspension control groups in biosynthesis and chondrogenesis. Higher cell density impacted biosynthesis favorably, and the number of aggregates positively influenced chondrogenesis. Therefore, we recommend that investigators employing hydrogels consider using cells in an aggregate form for enhanced chondrogenic performance.