Hydrogel-based cartilage tissue engineering strategies require the induction and long-term maintenance of adipose derived mesenchymal stem cells (ADMSC) into a stable chondrogenic phenotype. However, ADMSC exhibit the tendency to undergo hypertrophic differentiation, rather than forming permanent hyaline cartilage phenotype changes. This may hinder their implementation in articular cartilage regeneration, but may allow the possibility for bone and bone to soft tissue interface repair. In this study, we examined the effects of hydroxyapatite (HAp) on the chondrogenesis and hypertrophy of ADMSC within bioprinted hyaluronic acid (HA)-based hydrogels. We found that a small amount of HAp (∼10% of polymer concentration) promoted both chondrogenic and hypertrophic differentiation of ADMSC. Increased HAp contents promoted hypertrophic conversion and early osteogenic differentiation of encapsulated ADMSC. Subsequently, ADMSC-laden, stratified constructs with nonmineralized and mineralized layers (i.e., HA based and HA-HAp based) were 3D bioprinted. The constructs were conditioned in chondrogenic medium in either a normoxic or hypoxic environment for 8 weeks to assess the effects of oxygen tension on ADMSC differentiation and interface integration. We further implanted the bioprinted constructs subcutaneously into nude mice for 4 weeks. It was found that hypoxia partially inhibited hypertrophic differentiation by significantly down-regulating the expression of COL10A1, ALP, and MMP13. In addition, hypoxia also suppressed spontaneous calcification of ADMSC and promoted interface integration. This study demonstrates that both HAp content and hypoxia are important to mediate chondrogenesis, hypertrophy, and endochondral ossification of ADMSC. An optimized recipe and condition will allow for 3D bioprinting of multizonal grafts with integrated hard tissue and soft tissue interfaces for the treatment of complex orthopedic defects.