Recent studies have suggested that synovium-derived mesenchymal stem cells (SMSCs) may be promising candidates for tissue engineering and play an important role in cartilage regeneration. However, the mechanisms of SMSC chondrogenesis remain to be identified and characterized. The aim of this study was to evaluate the activation of the RhoA/Rho kinase (ROCK) pathway, as well as the manner by which it may contribute to chondrogenesis and the actin cytoskeletal organization of rat temporomandibular SMSCs in response to transforming growth factor-β1 (TGF-β1). Primary isolated SMSCs were treated with TGF-β1, and their actin organization was examined by fluorescein isothiocyanate-phalloidin staining. The specific biochemical inhibitors, C3 transferase, Y27632 and SB431542, were employed to evaluate the function of RhoA/ROCK and Smads. The effect of C3 transferase and Y27632 on the gene expression of chondrocyte-specific markers was evaluated by quantitative real-time polymerase chain reaction. To examine the effect of Y27632 on Smad2/3 phosphorylation induced by TGF-β1, western blot analysis was also performed. The stimulation of TGF-β1 in SMSCs resulted in the activation of the RhoA/ROCK pathway and concomitantly induced cytoskeletal reorganization, which was specifically blocked by C3 transferase and Y27632. The TGF-β-induced gene expression of Sox9, type I collagen, type II collagen and aggrecan was also inhibited by both C3 transferase and Y27632, at different levels. Y27632 treatment reduced the phosphorylation of Smad2/3 in a concentration-dependent manner. These results demonstrate the RhoA/ROCK activation regulates chondrocyte-specific gene transcription and cytoskeletal organization induced by TGF-β1 by interacting with the Smad pathway. This may have significant implications for the successful utilization of SMSCs as a cell source for articular cartilage tissue engineering.