State-of-the-art treatment for joint diseases like osteoarthritis focus on articular cartilage repair/regeneration by stem cell implantation therapy. However, the technique is limited by a lack of precision in the physician’s imaging and cell deposition toolkit. We describe a novel combination of high-resolution, rapid scan-rate optical coherence tomography (OCT) alongside a short-pulsed nanosecond thulium (Tm) laser for precise cell seeding in cartilage. The superior beam quality of thulium lasers and wavelength of operation 1940 nm offers high volumetric tissue removal rates and minimizes the residual thermal footprint. OCT imaging enables targeted micro-well placement, precise cell deposition, and feature contrast. A bench-top system is constructed using a 15 W, 1940 nm, nanosecond-pulsed Tm fiber laser (500 μJ pulse energy, 100 ns pulse duration, 30kHz repetition rate) for removing tissue, and a swept source laser (1310 ± 70 nm, 100 kHz sweep rate) for OCT imaging, forming a combined Tm/OCT system – a “smart laser knife”. OCT assists the smart laser knife user in characterizing cartilage to inform micro-well placement. The Tm laser creates micro-wells (2.35 mm diameter length, 1.5 mm width, 300 μm deep) and micro-incisions (1 mm wide, 200 μm deep) while OCT image-guidance assists and demonstrates this precision cutting and cell deposition with real-time feedback. To test micro-well creation and cell deposition protocol, gelatin phantoms are constructed mimicking cartilage optical properties and physiological structure. Cell viability is then assessed to illustrate the efficacy of the hydrogel deposition. Automated OCT feedback is demonstrated for cutting procedures to avoid important surface/subsurface structures. This bench-top smart laser knife system described here offers a new image-guided approach to precise stem cell seeding that can enhance the efficacy of articular cartilage repair.