ABSTRACT The heterogeneity of human umbilical cord mesenchymal stem cells (hUC‐MSCs) is culturing‐dependent, resulting in functional non‐uniformness. To achieve the best clinical benefit, a comprehensive understanding of the origin of the heterogeneity in different culture systems can identify functional subgroups to direct the precise application of hUC‐MSCs. Here, we create a single‐cell transcriptome atlas of hUC‐MSC in different culture systems for the identification of a subgroup of Ultroser‐G‐MSCs with high osteogenic and chondrogenic potentials featured by high expressions of IL1R1 and PDGFRA. Further experimental validations surprisingly reveal that IL1R1 high PDGFRA high Ultroser‐G‐MSCs possess advantages over “traditional” hUC‐MSCs in the treatments of modeled osteoarthritis, leading to a cell‐cell communication network centered in Clusters 0 and 2. Moreover, we found that Wnt5 signaling is the key pathway for the dynamic transformation of osteogenic and chondrogenic phenotypes in hUC‐MSC. Overall, the present study paves the way for the clarification of heterogenetic nature of hUC‐MSC in different culture systems for the selection of optimal MSC types to achieve the precision on clinical treatments.