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Articular cartilage defects are a common source of joint pain and dysfunction. We hypothesized that sustained low-dose dexamethasone (DEX) delivery via an acellular osteochondral implant would have a dual pro-anabolic and anti-catabolic effect, both supporting the functional integrity of adjacent graft and host tissue while also attenuating inflammation caused by iatrogenic injury. An acellular agarose hydrogel carrier with embedded DEX-loaded poly(lactic-co-glycolic) acid (PLGA) microspheres (DLMS) was developed to provide sustained release for at least 99 days. The DLMS implant was first evaluated in an in vitro pro-inflammatory model of cartilage degradation. The implant was chondroprotective, as indicated by maintenance of Young's modulus (E Y ) (p = 0.92) and GAG content (p = 1.0) in the presence of interleukin-1β insult. In a subsequent preliminary in vivo experiment, an osteochondral autograft transfer was performed using a pre-clinical canine model. DLMS implants were press-fit into the autograft donor site and compared to intra-articular DEX injection (INJ) or no DEX (CTL). Functional scores for DLMS animals returned to baseline (p = 0.39), whereas CTL and INJ remained significantly worse at 6 months (p < 0.05). DLMS knees were significantly more likely to have improved OARSI scores for proteoglycan, chondrocyte, and collagen pathology (p < 0.05). However, no significant improvements in synovial fluid cytokine content were observed. In conclusion, utilizing a targeted DLMS implant, we observed in vitro chondroprotection in the presence of IL-1-induced degradation and improved in vivo functional outcomes. These improved outcomes were correlated with superior histological scores but not necessarily a dampened inflammatory response, suggesting a primarily pro-anabolic effect. STATEMENT OF SIGNIFICANCE: Articular cartilage defects are a common source of joint pain and dysfunction. Effective treatment of these injuries may prevent the progression of osteoarthritis and reduce the need for total joint replacement. Dexamethasone, a potent glucocorticoid with concomitant anti-catabolic and pro-anabolic effects on cartilage, may serve as an adjuvant for a variety of repair strategies. Utilizing a dexamethasone-loaded osteochondral implant with controlled release characteristics, we demonstrated in vitro chondroprotection in the presence of IL-1-induced degradation and improved in vivo functional outcomes following osteochondral repair. These improved outcomes were correlated with superior histological cartilage scores and minimal-to-no comorbidity, which is a risk with high dose dexamethasone injections. Using this model of cartilage restoration, we have for the first time shown the application of targeted, low-dose dexamethasone for improved healing in a preclinical model of focal defect repair., (Copyright © 2019. Published by Elsevier Ltd.)