A tissue culture system is described for explants of mesenchyme from Ambystoma mexicanum limb regeneration blastemas. Explants were cultured on collagen substrate for 3 weeks in minimal essential medium supplemented with the hormones insulin, thyroxine, somatotropin, and hydrocortisone, plus beef embryo extract (EE), 2%. This medium supported extensive cell migration onto the substrate followed by cell proliferation and differentiation of both cartilage matrix and myotubes. Cultures on plastic substrate, rather than on collagen, displayed similar cell outgrowth and cartilage formation, but relatively little myotube formation. Differentiation in EE-supplemented medium was compared with that in two defined media: Explants in medium containing only the hormones showed little outgrowth or cartilage development and never formed myotubes; medium containing the hormones plus fibroblast growth factor, 50 ng/ml, supported an intermediate degree of outgrowth and cartilage development and occasional myotube formation. Explant size was also a factor: Smaller explants survived and formed myotubes less frequently, even when on collagen in EE-supplemented medium.