Osteochondromas occur as sporadic solitary lesions or as multiple lesions, characterizing the hereditary multiple exostoses syndrome (EXT). Approximately 15% of all chondrosarcomas arise within the cartilaginous cap of an osteochondroma. EXT is genetically heterogeneous, and two genes, EXT1 and EXT2, located on 8q24 and 11p11-p12, respectively, have been cloned. It is still unclear whether osteochondroma is a developmental disorder or a true neoplasm. Furthermore, it is unclear whether inactivation of both alleles of an EXT gene, according to the tumor-suppressor model, is required for osteochondroma development, or whether a single EXT germline mutation acts in a dominant negative way. We therefore studied loss of heterozygosity and DNA ploidy in eight sporadic and six hereditary osteochondromas. EXT1- and EXT2-mutation analysis was performed in a total of 34 sporadic and hereditary osteochondromas and secondary peripheral chondrosarcomas. We demonstrated osteochondroma to be a true neoplasm, since aneuploidy was found in 4 of 10 osteochondromas. Furthermore, LOH was almost exclusively found at the EXT1 locus in 5 of 14 osteochondromas. Four novel constitutional cDNA alterations were detected in exon 1 of EXT1. Two patients with multiple osteochondromas demonstrated a germline mutation combined with loss of the remaining wild-type allele in three osteochondromas, indicating that, in cartilaginous cells of the growth plate, inactivation of both copies of the EXT1 gene is required for osteochondroma formation in hereditary cases. In contrast, no somatic EXT1 cDNA alterations were found in sporadic osteochondromas. No mutations were found in the EXT2 gene.