Resorption of uncalcified cartilage in the embryonic chick femur appears to be mediated by two types of mononuclear cells. One cell type lies flattened and adherent along the surface of the cartilage matrix into which it extends cellular processes. Cytological characteristics of a large, euchromatic nucleus containing a nucleolus, and cytoplasm containing moderate to extensive amounts of rough endoplasmic reticulum indicate that these are protein synthetic cells. Macrophages, characterized by a pleomorphic shape and cytoplasm containing numerous mitochondria and vesicles, comprise the second cell type. These may be seen lying in contact with cartilage matrix, but are more likely located in the nonhematopoietic marrow adjacent to resorbing cartilage, where they establish close cellular associations with protein synthetic cells. Alkaline and acid phosphatase histochemical studies differentiate these two cellular types. Marrow alkaline phosphatase activity is restricted to the cartilage-marrow interface from which it diffuses a short distance into cartilage matrix, but does not diffuse into nearby marrow. Intracellular alkaline phosphatase is present only in protein synthetic cells that line the surface of cartilage, and thus appears to be produced by these cells. Acid phosphatase positive macrophages are scattered throughout the marrow, but are found in greatest concentrations in the region of cartilage resorption. They are rarely in direct contact with cartilage, and there is no evidence that acid phosphatase is released from these cells. The relative localizations and the presence of cellular interactions of these two cell types suggests that protein synthetic cells may be of fibroblastic origin, and may play a primary role in cartilage degradation, while macrophages, in keeping with biochemical evidence, play an adjunct or possibly a regulative role.