We have examined the expression of the gene for Cart-1, a new homeodomain-containing protein, during rat embryonic development. In early embryos, Cart-1 RNA was detected at high levels in head mesenchyme, lateral mesoderm, sclerotomes and limb bud mesenchyme. These tissues contain prechondrocytic mesenchymal cells responsible for the formation of the cartilaginous skeleton. In addition, Cart-1 RNA was also found in lung buds, tendons and mesonephros. Cells in these tissues have the potential of undergoing chondrogenesis either in explants for mesonephros and tendons, or in vivo for tendons and the precursors of bronchi cartilages. No hybridization was observed in brain, spinal cord, heart, spleen, gastrointestinal tract, liver and muscle. Our results support the hypothesis that Cart-1 may play a role in the pathway of chondrogenesis. The gene for Cart-1 was mapped to a segment of mouse chromosome 10 between the genes for phenylalanine hydroxylase and interferon gamma.