Current in vitro investigations suggest that ectoderm plays a major role in limb morphogenesis by producing a diffusible factor which inhibits the chondrogenesis of the underlying mesenchyme. In the present work we report evidence supporting such an ectodermal role in vivo. Surgical removal of the marginal ectoderm from the third interdigit of chick leg buds at stages 27 to 30 induces the formation of PNA-positive prechondrogenic mesenchymal condensations 15 hr after the operation. The incidence of prechondrogenic condensations achieved 47, 95.2, and 92.8 of the experimental embryos of stages 27, 28, and 29, respectively. This high rate of prechondrogenic aggregate formation contrasted with a lower incidence of ectopic cartilage formation detectable by Alcian blue staining 40 hr after the operation. The sequential analysis of the experimental interdigits by means of peanut lectin labeling suggests that a number of prechondrogenic condensations undergo disaggregation 20 and 30 hr after the operation failing to form fully differentiated cartilages. When ectoderm removal was accompanied by the elimination of a variable amount of interdigital mesenchyme the incidence of prechondrogenic aggregates showed little differences but the formation of fully differentiated cartilages was reduced at a rate proportional to the amount of interdigital mesenchyme removed. From this study it can be concluded that the ectoderm in vivo appears to inhibit the process of aggregation of the mesenchymal cells to form prechondrogenic condensations. Furthermore our results suggest that as observed in vitro (C. P. Cotrill, C. Archer, and L. Wolpert, 1987, Dev. Biol. 122, 503-515) the transformation of prechondrogenic aggregates into fully differentiated cartilage requires the involvement of a critical amount of mesenchymal cells.