The possible role of TGF-beta-like molecules in skeletal pattern formation in the embryonic vertebrate limb was studied by analyzing the mechanism of enhancement of chondrogenesis in chick wing bud mesenchyme in vitro and testing for the presence and distribution of endogenous TGF-beta-like activity in this tissue. Transient exposure (3-6 hr) to TGF-beta 1 (1-2 ng/ml) on the day after plating resulted in a 1.5- to 2-fold enhancement of accumulation of Alcian blue (pH 1.0)-stainable extracellular matrix 5 days later. The enhancement of differentiation was preceded by an acceleration and an increase in the extent of precartilage condensation formation, visualized by Hoffman Modulation Contrast microscopy a day after TGF-beta treatment. In contrast, neither condensation nor subsequent chondrogenesis was stimulated by transient treatment with TGF-beta 1 on the day of plating. The effectiveness of a TGF-beta treatment regimen in enhancing chondrogenesis was correlated with its effectiveness in stimulating condensation formation. Exposures to the factor for 3-6 hr on the day after plating, which most consistently stimulated both condensation formation and chondrogenesis, also corresponded to a peak in the enhancement of the steady-state level of fibronectin mRNA (fourfold to eightfold over control levels) measured at the end of the treatment period. The elevation in fibronectin mRNA levels brought about by this treatment persisted throughout the period of condensation. Endogenous TGF-beta-like activity was detected in limb mesenchyme: extracts of freshly isolated and cultured limb tissues contained 6-25 pg TGF-beta-like activity per 1 x 10(6) cells by the Mv1Lu cell proliferation inhibition assay, and indirect immunofluorescence using a polyclonal antibody directed against a TGF-beta-related peptide indicated a patchy distribution of endogenous TGF-beta-like reactivity within a day after culture. These findings are discussed in relation to the "fibronectin prepattern" hypothesis for limb pattern formation.