Methods of regenerating tissue using progenitor cells in combination with primary cells from a target tissue are disclosed. In particular, progenitor cells catalyze proliferation and tissue production by primary cells allowing the use of fewer primary cells from a target tissue for effective tissue regeneration. Cell-based therapies combining progenitor cells and primary cells can be used for repair and regeneration of damaged tissue and organs for treating bodily injuries and degenerative diseases. For example, adipose-derived stem cells and neonatal articular chondrocytes, co-encapsulated in mixed or bilayered cultures in a hydrogel comprising chondroitin sulfate methacrylate and poly(ethylene)glycol diacrylate, generated cartilage that could be used for treatment of traumatic injuries or diseases involving cartilage degeneration. Moreover, the inventors showed that progenitor cells could be used to stimulate cartilage formation with a minimal number of primary cells, as few as 1% or less, in mixed cultures containing primary cells and progenitor cells.