The expression of alpha-smooth muscle actin (SMA) by human mesenchymal stem cells (hMSCs) during chondrogenesis was investigated by the use of pellet culture. Undifferentiated hMSCs expressed low but detectable amounts of SMA and the addition of transforming growth factor beta1 (TGF-beta1) to the culture medium increased SMA expression in a dose-dependent manner. Differentiation in pellet culture was rapidly induced in the presence of TGF-beta1 and was accompanied by the development of annular layers at the surface of the pellet. These peripheral layers lacked expression of glycosaminoglycan and type II collagen during early differentiation. Progress in differentiation increased the synthesis of glycosaminoglycan and type II collagen and the expression of SMA in these layers. Double-staining for type II collagen and SMA by immunofluorescence demonstrated the differentiation of hMSCs into cells positive for these two proteins. The addition of cytochalasin D, a potent inhibitor of the polymerization of actin microfilaments, caused damage to the structural integrity and surface smoothness of the chondrogenic pellets. The SMA-positive cells in the peripheral layers of the chondrogenic pellets mimic those within the superficial layer of articular cartilage and are speculated to play a major role in cartilage development and maintenance.