Cartilage has a multiscale structure with collagen nanofibers as the building block at the nanoscale. The orientation and type of collagen fibers have a major impact on phenotypic expression of the residing chondrocytes and physiomechanical properties of the matrix. Hence nanofibrous scaffolds that mimic the structural characteristics of the native matrix are very attractive as a supporting matrix in engineering of articular cartilage. Matrix stiffness, cell-matrix interaction, cell differentiation and the formation of a new cartilage tissue can be enhanced by incorporation of nanofibers in tissue engineering scaffolds. Owing to their high surface-to-volume ratio, nanofibers provide enormous surface area for cell-matrix interaction and localized and timed delivery of growth factors in cartilage regeneration. Nanofibers can also serve as a substrate to regulate cell shape and orientation or generate matrices with anisotropic mechanical properties. The fibrous nature of the scaffold can affect morphology, function, and fate of the stem cell in cartilage tissue engineering. This work reviews novel approaches for generation of scaffolds and matrices with nanoscale fibrous structures and the role of nanofibers in chondrogenic differentiation of stem cells to a specified phenotype in tissue constructs.