We previously used subtractive hybridization to isolate cDNAs for genes upregulated in chick hypertrophic chondrocytes (Nurminskaya, M., and T.F. Linsenmayer. 1996. Dev. Dyn. 206:260–271). Certain of these showed homology with the “A” subunit of human plasma transglutaminase (factor XIIIA), a member of a family of enzymes that cross-link a variety of intracellular and matrix molecules. We now have isolated a full-length cDNA for this molecule, and confirmed that it is avian factor XIIIA. Northern and enzymatic analyses confirm that the molecule is upregulated in hypertrophic chondrocytes (as much as eightfold). The enzymatic analyses also show that appreciable transglutaminase activity in the hypertrophic zone becomes externalized into the extracellular matrix. This externalization most likely is effected by cell death and subsequent lysis—effected by the transglutaminase itself. When hypertrophic chondrocytes are transfected with a cDNA construct encoding the zymogen of factor XIIIA, the cells convert the translated protein to a lower molecular weight form, and they initiate cell death, become permeable to macromolecules and eventually undergo lysis. Non-hypertrophic cells transfected with the same construct do not show these degenerative changes. These results suggest that hypertrophic chondrocytes have a novel, tissue-specific cascade of mechanisms that upregulate the synthesis of plasma transglutaminase and activate its zymogen. This produces autocatalytic cell death, externalization of the enzyme, and presumably cross-linking of components within the hypertrophic matrix. These changes may in turn regulate the removal and/or calcification of this hypertrophic matrix, which are its ultimate fates.