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Introduction: Cartilage defects in the knee can be caused by injury, various types of arthritis, or degeneration. As a long-term consequence of cartilage defects, osteoarthritis can develop over time, often leading to the need for a total knee replacement (TKR). The treatment alternatives of chondral defects include, among others, microfracture, and matrix-associated autologous chondrocyte implantation (M-ACI). The purpose of this study was to determine cost-effectiveness of M-ACI in Germany with available mid- and long-term outcome data, with special focus on the avoidance of TKR. Materials and methods: We developed a discrete-event simulation (DES) that follows up individuals with cartilage defects of the knee over their lifetimes. The DES was conducted with a status-quo scenario in which M-ACI is available and a comparison scenario with no M-ACI available. The model included 10,000 patients with articular cartilage defects. We assumed Weibull distributions for short- and long-term effects for implant failures. Model outcomes were costs, number of TKRs, and quality-adjusted life years (QALYs). All analyses were performed from the perspective of the German statutory health insurance. Results: The majority of patients was under 45 years old, with defect sizes between 2 and 7 cm2 (mean: 4.5 cm2); average modeled lifetime was 48 years. In the scenario without M-ACI, 26.4% of patients required a TKR over their lifetime. In the M-ACI scenario, this was the case in only 5.5% of cases. Thus, in the modeled cohort of 10,000 patients, 2700 TKRs, including revisions, could be avoided. Patients treated with M-ACI experienced improved quality of life (22.53 vs. 21.21 QALYs) at higher treatment-related costs (18,589 vs. 14,134 € /patient) compared to those treated without M-ACI, yielding an incremental cost‐effectiveness ratio (ICER) of 3376 € /QALY. Conclusion: M-ACI is projected to be a highly cost‐effective treatment for chondral defects of the knee in the German healthcare setting. [ABSTRACT FROM AUTHOR]