The ability of cell shape to modulate proteoglycan synthesis in tendon fibroblasts was investigated by placing freshly isolated tendon fibroblasts and chondrocytes into primary culture either as adherent cells on a polystyrene substratum or as rounded cells in alginate beads. Chondrocytes and cells from the compressed region of adult tendon synthesized predominantly large proteoglycan when maintained either as dense monolayers, where actin stress fibers in the cytoskeleton were prominent, or in alginate beads, where actin fibers could not be detected. After three rounds of proliferation as elongated adherent cells the synthesis of large proteoglycan was greatly reduced, i.e. the chondrocytic cells underwent 'dedifferentiation'. Cells from the tensional region of adult tendon synthesized predominantly small proteoglycan when in primary culture as a monolayer, after proliferation on a flat substratum, or as round cells in alginate beads. Fibroblasts from the tensional region of newborn tendon showed no tendency toward increased synthesis of large proteoglycan when maintained as round cells in alginate beads for 7 weeks. In tendon there appears to be a mechanically induced developmental transition from fibroblastic to chondrocytic cells. However, neither the change to a rounded cell shape nor the lack of organized cytoskeletal actin fibers was sufficient to induce chondrocyte-like proteoglycan synthesis in differentiated tendon fibroblasts in culture.