Abstract. When transferred to suspension culture on agarose-coated dishes, dedifferentiated chick embryo chondrocytes resume the chondrocyte phenotype and continue their maturation to hypertrophic chondrocytes (Castagnola, P., G. Moro, E Descalzi Cancedda, and R. Cancedda. 1986. J. Cell Biol. 102:2310-2317. In this paper we report the identification, purification, and characterization of a low molecular weight protein, named Ch 21, expressed and secreted by in vitro differentiating chondrocytes at a late stage of development. This protein is detectable in the cells after a short pulse labeling and is directly secreted in the culture medium. The Ch 21 protein has a peculiar resistance to limited pepsin digestion; nevertheless it is not collagenous in nature as revealed by its unaltered mobility when isolated from cells grown in the presence of ~t-tt' dipyridyl, its resistance to bacterial collagenase, and its amino acid composition. By metabolic labeling of tissue slices and by immunohistochemistry, we show that in the chick embryo tibia the Ch 21 protein first appears at the boundary of the cone of hypertrophic cartilage and in the newly formed bone between the 6 and 10 d of embryo development and localizes in calcifying hypertrophic cartilage thereafter. The Ch 21 protein synthesized by the cultured chondrocytes is closely related and possibly identical to a 21K transformation-sensitive protein associated to the cell substratum of chick embryo fibroblasts.I s the developmental pathway leading to the organogenesis of long bones, undifferentiated mesenchymal cells pass sequentially through at least three differentiation stages: (a) committed mesenchymal cells, producing type I collagen and possibly basal level of type II collagen (19); (b) stage I (proliferating) chondrocytes, characterized by the synthesis of a large amount of type II collagen (12,19,27); and (c) stage II (hypertrophic) chondrocytes, characterized by the synthesis of type X collagen (6,17,23).To investigate endochondral bone formation at a cellular and molecular level we have developed in the last few years a culture system starting from tibial chondrocytes of early stage chick embryos. Freshly dissociated chondrocytes from tibiae of stage 28-30 (11) embryos assume a fibroblast-like morphology and switch from the synthesis of type II to the synthesis of type I collagen when they are cultured as adherent cells on plastic dishes. When these dedifferentiated cells are transferred to agarose-coated dishes (suspension culture) they resume the chondrocyte phenotype and continue their maturation to single, isolated hypertrophic chondrocytes producing type X collagen (8). This process results in a large increase of the duration of all cell cycle phases and of the number of quiescent and degenerating cells (10). When the dedifferentiated cells are cultured in suspension in the presence of ascorbic acid, a cofactor of collagen hydroxylases, they develop into a tissue resembling hypertrophic cartilage (26).The in vitro transition from dedifferentiated chon...