The integrity of articular cartilage depends on the proper functioning and mechanical stimulation of chondrocytes, the cells that synthesize extracellular matrix and maintain tissue health. The biosynthetic activity of chondrocytes is influenced by genetic factors, environmental influences, extracellular matrix composition, and mechanical factors. The mechanical environment of chondrocytes is believed to be an important determinant for joint health, and chondrocyte deformation in response to mechanical loading is speculated to be an important regulator of metabolic activity. In previous studies of chondrocyte deformation, articular cartilage was described as a biphasic material consisting of a homogeneous, isotropic, linearly elastic solid phase, and an inviscid fluid phase. However, articular cartilage is known to be anisotropic and inhomogeneous across its depth. Therefore, isotropic and homogeneous models cannot make appropriate predictions for tissue and cell stresses and strains. Here, we modelled articular cartilage as a transversely isotropic, inhomogeneous (TI) material in which the anisotropy and inhomogeneity arose naturally from the microstructure of the depth-dependent collagen fibril orientation and volumetric fraction, as well as the chondrocyte shape and volumetric fraction. The purpose of this study was to analyse the deformation behaviour of chondrocytes using the TI model of articular cartilage. In order to evaluate our model against experimental results, we simulated indentation and unconfined compression tests for nominal compressions of 15%. Chondrocyte deformations were analysed as a function of location within the tissue. The TI model predicted a non-uniform behaviour across tissue depth: in indentation testing, cell height decreased by 43% in the superficial zone and between 11 and 29% in the deep zone. In unconfined compression testing, cell height decreased by 32% in the superficial zone, 25% in the middle, and 18% in the deep zones. This predicted non-uniformity is in agreement with experimental studies. The novelty of this study is the use of a cartilage material model accounting for the intrinsic inhomogeneity and anisotropy of cartilage caused by its microstructure.