Cartilage defects are commonly observed in orthopedic clinical studies. Owing to the unique structure of cartilage tissue, current clinical treatments cannot fully address this issue. Cartilage organoids are three-dimensional (3D) active tissue structures constructed in vitro to mimic the structure and function of natural cartilage tissue and can be utilized for disease research and cartilage repair. In this study, we engineered MNPs-BMSCs by introducing magnetic nanoparticles (MNPs) into bone marrow mesenchymal stem cells (BMSCs). Under the influence of the magnetic field induced by the MNPs, MNPs-BMSCs became polarized, significantly enhancing their aggregation, migration, and chondrogenic differentiation capabilities. We then used these engineered MNPs-BMSCs as seed cells and applied 3D bioprinting technology to construct an advanced cartilage organoid using a MNPs-BMSC/alginate/gelatin matrix. This structure partially mimics the middle layer of a cartilage. The advanced cartilage organoid demonstrated superior chondrogenic differentiation ability and mechanical properties in vitro. It significantly enhanced tissue repair in cartilage defect areas in vivo, restoring the normal structure of the cartilage layer. Overall, the engineered MNPs-BMSCs/alginate/gelatin advanced cartilage organoids offer a promising approach for studying cartilage tissue in vitro and advancing cartilage repair within the field of tissue engineering.