Provided are procedures and instruments for preparing and transplanting osteochondral allograft plugs to a host bone to repair an articular cartilage defect. An allograft bone plug having a cartilage plate and cancellous bone tissue attached thereto is removed from a donor bone. The allograft plug is further shaped by removing or cutting away cancellous bone tissue to form a cancellous stalk extending from the cartilage plate. The formed cancellous stalk can have any suitable shape including cylindrical, conical, and rectilnear. At the recipient site of the host bone, a cutout is formed corresponding in shape to the allograft plug. The allograft plug is inserted into the cutout such that the cancellous stalk is retained in the host bone and the cartilage plate aligns with the condyle surface of the host bone. Aspects of the invention may also be applicable to preparing and transplanting osteochondral autograft plugs.