The anterior disc displacement (ADD) leads to temporomandibular joint osteoarthritis (TMJOA) and mandibular growth retardation in adolescents. To investigate the potential functional role of fibrocartilage stem cells (FCSCs) during the process, a surgical ADD-TMJOA mouse model was established. From 1 week after model generation, ADD mice exhibited aggravated mandibular growth retardation with osteoarthritis (OA)-like joint cartilage degeneration, manifesting with impaired chondrogenic differentiation and loss of subchondral bone homeostasis. Lineage tracing using Gli1-CreER⁺; Tm^fl/-mice and Sox9-CreER⁺;Tm^fl/-mice showed that ADD interfered with the chondrogenic capacity of Gli1⁺ FCSCs as well as osteogenic differentiation of Sox9⁺ lineage, mainly in the middle zone of TMJ cartilage. Then, a surgically induced disc reposition (DR) mouse model was generated. The inhibited FCSCs capacity was significantly alleviated by DR treatment in ADD mice. And both the ADD mice and adolescent ADD patients had significantly relieved OA phenotype and improved condylar growth after DR treatment. In conclusion, ADD-TMJOA leads to impaired chondrogenic progenitor capacity and osteogenesis differentiation of FCSCs lineage, resulting in cartilage degeneration and loss of subchondral bone homeostasis, finally causing TMJ growth retardation. DR at an early stage could significantly alleviate cartilage degeneration and restore TMJ cartilage growth potential.