Clonal cell line ATDC5 enables the monitoring of the early- and late-phase chondrogenic differentiation in a single culture. Undifferentiated ATDC5 cells differentiate into type II collagen expressing chondrocytes through a cellular condensation stage (early-phase differentiation) and then to type X collagen-expressing hypertrophic chondrocytes (late-phase differentiation). Progression of cellular differentiation was accelerated by the activation of bone morphogenetic protein (BMP) signaling. ATDC5 cells expressed transcripts for at least four members of the BMP family. The BMP-4 transcripts were expressed in all stages of differentiation, as were transcripts for BMP type IA receptor (ALK-3) and BMP type II receptor. In contrast, transcripts for Growth/ Differentiation factor-S (GDF-5) were induced during a cellular condensation, and those for BMP-6 were induced during the formation of cartilage nodules, and declined as the differentiated ATDC5 cells became hypertrophic, and BMP-7 transcripts were only detected after cells became calcified. Exogenously added BMP-4 indeed promoted the early-phase differentiation. Late-phase differentiation of cells was also stimulated by BMP-4 and BMP-6. Thus, the cumulative increase in BMP signaling promoted the sequential transitions of differentiation steps of cells. These results indicate that the coordinated expressions of endogenous BMPs are involved in the progression of chondrogenic differentiation in ATDC5 cells.