To identify the local factors in cartilage that are responsible for the induction of pannus invasion, a 14 day organ culture study in which rheumatoid synovium was grown in contact with cartilage pieces was carried out. Rheumatoid synovium preferentially extended over hyaluronidase treated cartilage pieces, but detached from untreated pieces. Rheumatoid synovium extended over hyaluronidase treated cartilage surfaces containing fibronectin more extensively than over surfaces treated with hyaluronidase only. Extension over hyaluronidase treated cartilage surfaces containing immune complexes was small. The adherence of synovial cells to hyaluronidase treated cartilage slices in vitro was specifically inhibited by the synthetic peptide, Gly-Arg-Gly-Asp-Ser-Pro, which is the adhesive portion of the fibronectin molecule. Furthermore, synovial fibroblast-like cellular extension, morphologically similar to rheumatoid pannus, was observed in the organ culture experiments in which rheumatoid synovium grew over hyaluronidase treated cartilage surfaces containing fibronectin. Synovial tissue extension over fibronectin coated surfaces was inhibited when hyaluronic acid and chondroitin-4-sulphate, major components of cartilage proteoglycans, were present on the cartilage surface. These findings suggest that fibronectin present in the superficial region of cartilage potentiates rheumatoid synovial extension and proteoglycans and immune complexes inhibit rheumatoid synovial extension. It is likely that fibronectin deposited on the eroded surface of articular cartilage induces pannus formation in rheumatoid arthritis.