Objective This study tested the hypothesis that presolidified chitosan-blood implants are retained in subchondral bone channels perforated in critical-size sheep cartilage defects, and promote bone repair and hyaline-like cartilage resurfacing versus blood implant. Design Cartilage defects (10 × 10 mm) with 3 bone channels (1 drill, 2 Jamshidi biopsy, 2 mm diameter), and 6 small microfracture holes were created bilaterally in n = 11 sheep knee medial condyles. In one knee, 10 kDa chitosan-NaCl/blood implant (presolidified using recombinant factor VIIa or tissue factor), was inserted into each drill and Jamshidi hole. Contralateral knee defects received presolidified whole blood clot. Repair tissues were assessed histologically, biochemically, biomechanically, and by micro-computed tomography after 1 day ( n = 1) and 6 months ( n = 10). Results Day 1 defects showed a 60% loss of subchondral bone plate volume fraction along with extensive subchondral hematoma. Chitosan implant was resident at day 1, but had no effect on any subsequent repair parameter compared with blood implant controls. At 6 months, bone defects exhibited remodeling and hypomineralized bone repair and were partly resurfaced with tissues containing collagen type II and scant collagen type I, 2-fold lower glycosaminoglycan and fibril modulus, and 4.5-fold higher permeability compared with intact cartilage. Microdrill holes elicited higher histological ICRS-II overall assessment scores than Jamshidi holes (50% vs. 30%, P = 0.041). Jamshidi biopsy holes provoked sporadic osteonecrosis in n = 3 debrided condyles. Conclusions Ten kilodalton chitosan was insufficient to improve repair. Microdrilling is a feasible subchondral marrow stimulation surgical approach with the potential to elicit poroelastic tissues with at least half the compressive modulus as intact articular cartilage.