Micromass cultures of mesenchymal cells isolated from limb buds of 11.5-day-old mouse fetuses were used to study chondrogenesis. After 3 days of culture, dense cell aggregates were observed. They then were converted into macroscopically visible cartilage foci during the following 2–4 days. Comparison of 2-, 4- and 7-day-old cultures has shown that the cells first expressed collagen type I, then switched to collagen type II expression as shown by immunohistochemistry and in situ hybridization. At day 7, proteoglycans were synthesized centrally in the foci. At the same time, most cells expressed collagen type II, with the highest expression in the periphery of the aggregates. The oncogene c-fos and homeodomain protein FS-1 were found in the cells expressing collagen type II, indicating that these transcription factors may be involved in the regulation of cell differentiation. The expression of alkaline phosphatase was detected first in mature cartilage foci (day 4) and increased during culture. Early in culture, DNA-replicating cells were uniformly distributed. With differentiation, the proliferating cells were present predominantly between the aggregates and their total number became significantly reduced. Our results indicate that the process of chondrogenesis in micromass cultures of mesenchymal cells mimics the differentiation process occurring during fetal development in vivo and can be directly studied by in situ hybridization, immunohistochemical and histochemical methods.