Previously, we showed that mesenchymal stromal cells (MSCs) in co-culture with primary chondrocytes secrete soluble factors that increase chondrocyte proliferation. The objective of this study is to identify these factors. Human primary chondrocytes (hPCs) isolated from late-stage osteoarthritis patients were co-cultured with human bone marrow-derived MSCs (hMSCs) in pellets. Genome-wide mRNA expression analysis and quantitative polymerase chain reactions (qPCR) were used to identify soluble factors that were specifically induced in co-cultures. Immunofluorescent staining combined with cell tracking and enzyme-linked immunosorbent assay (ELISA) were performed to validate up-regulation at the protein level and to identify the cellular origin of the increased proteins. Chemical blockers and neutralizing antibodies were used to elucidate the role of the identified candidate genes in co-cultures. A number of candidate factors were differentially regulated in co-cultures at the mRNA level. Of these, fibroblast growth factor-1 (FGF-1) mRNA and protein expression were markedly increased in co-cultures predominantly due to up-regulated expression in MSCs. Blocking of FGF signaling in co-culture pellets by specific FGF receptor inhibitors or FGF-1 neutralizing antibodies completely blocked hPCs proliferation. We demonstrate that MSCs increase FGF-1 secretion on co-culture with hPCs, which, in turn, is responsible for increased hPCs proliferation in pellet co-cultures.