Osteoarthritis (OA), characterized by cartilage proteoglycan depletion, synovial inflammation and joint effusion, develops after transection of the anterior cruciate ligament of the canine stifle joint. Synovial villi harvested from the unstable knee of dogs 8 to 14 weeks after cruciate ligament transection and studied in organ culture synthesized more 3H-hyaluronic acid/microgram tissue DNA than villi from the contralateral stifle joints (p less than 0.02). Rates of glycosaminoglycan (GAG) synthesis by synovial cells isolated from the OA joints were comparable to those of synovial cells from contralateral joints, but cells from OA joints tended to proliferate more rapidly (p less than 0.01). Synovial conditioned medium prepared with villi from the OA joints stimulated GAG synthesis and proliferation in synovial cell cultures to a greater extent than either medium prepared with villi from the contralateral knees, or unconditioned medium. Pronase digestion eliminated the stimulatory effect of the conditioned medium. Our results suggest that soluble protein(s) released from the synovium may mediate the synovial proliferation and excessive secretion of hyaluronic acid observed in this arthropathy.