Human adipose-derived stem cells (ASCs) are a commonly used cell type for cartilage tissue engineering. However, donor-to-donor variability, cell heterogeneity, inconsistent chondrogenic potential, and limited expansion potential can hinder the use of these cells for modeling chondrogenesis, in vitro screening of drugs and treatments for joint diseases, or translational applications for tissue engineered cartilage repair. The goal of this study was to create an immortalized ASC line that showed enhanced and consistent chondrogenic potential for applications in cartilage tissue engineering as well as to provide a platform for investigation of biological and mechanobiological pathways involved in cartilage homeostasis and disease. Starting with the ASC52telo cell line, a hTERT-immortalized ASC line, we used lentivirus to overexpress SOX9, a master regulator of chondrogenesis, and screened several clonal populations of SOX9 overexpressing cells to form a new stable cell line with high chondrogenic potential. One clonal line, named ASC52telo-SOX9, displayed increased GAG and type II collagen synthesis and was found to be responsive to both mechanical and inflammatory stimuli in a manner similar to native chondrocytes. The development of a clonal line such as ASC52telo-SOX9 has the potential to be a powerful tool for studying cartilage homeostasis and disease mechanisms in vitro, and potentially as a platform for in vitro drug screening for diseases that affect articular cartilage. Our findings provide an approach for the development of other immortalized cell lines with improved chondrogenic capabilities in ASCs or other adult stem cells.