CD271 is a marker of bone marrow MSCs with enhanced differentiation capacity for bone or cartilage repair. However, the nature of CD271+ MSCs from adipose tissue (AT) is less well understood. Here, we investigated the differentiation, wound healing and angiogenic capacity of plastic adherent MSCs (PA MSCs) versus CD271+ MSCs from AT. There was no difference in the extent to which PA MSCs and CD271+ MSCs formed osteoblasts, adipocytes or chondrocytes in vitro. In contrast, CD271+ MSCs transplanted into athymic rats significantly enhanced osteochondral wound healing with reduced vascularisation in the repair tissue compared to PA MSCs and control animals; there was little histological evidence of mature articular cartilage formation in all animals. Conditioned medium from CD271+ MSC cultures was less angiogenic than PA MSC conditioned medium, and had little effect on endothelial cell migration or endothelial tubule formation in vitro. The low angiogenic activity of CD271+ MSCs and improved early stage tissue repair of osteochondral lesions when transplanted, along with a comparable differentiation capacity along mesenchymal lineages when induced, suggests that these selected cells are a better candidate than PA MSCs for the repair of cartilaginous tissue.