This study presents a three-dimensional (3D)-bioprinted kartogenin (KGN)-loaded hydrogel with optimized biocompatibility and biomechanical properties for cartilage regeneration. By investigating the molecular mechanisms underlying KGN-induced chondrogenic differentiation of bone marrow stromal cells (BMSCs), we identified the critical role of the Smad1/5/9 signaling pathway through transcriptomic analysis. The hydrogel scaffold demonstrated uniform microstructure, robust mechanical stability, and controlled degradation, supporting BMSC adhesion and proliferation. In vitro experiments revealed that KGN activation of Smad1/5/9 significantly enhanced chondrogenic differentiation, evidenced by upregulated cartilage-specific matrix production and morphological changes in BMSCs, while pathway inhibition diminished this effect. Animal experiments using a rat model of cartilage injury demonstrated the hydrogel’s biosafety, with no systemic toxicity or adverse inflammation, and its capacity to promote structured neocartilage formation rich in type II collagen. Histological and immunohistochemical analyses further validated the hydrogel’s superior repair efficacy compared to controls. These findings highlight the dual functionality of the 3D-printed KGN-loaded hydrogel as a mechanically stable carrier and a bioactive inducer of BMSC chondrogenesis, mediated via Smad1/5/9 signaling, offering a promising strategy for cartilage tissue engineering.