We show that a new rat chondrosarcoma (RCS) cell line established in long-term culture from the Swarm tumor displayed a stable differentiated chondrocyte-like phenotype. Indeed, these cells produced the collagen types II, IX, and XI and alcian blue-stainable cartilage-specific proteoglycans, but no type I or type III collagen. To functionally characterize their chondrocytic nature, the cells were stably transfected with a type II collagen/beta geo chimeric gene which confers essentially perfect chondrocyte-specific expression in transgenic mice. RCS cells expressed both beta-galactosidase and G418 resistance, in comparison with similarly transfected 10T1/2 and NIH/3T3 fibroblasts which did not. These cells were then used to perform a systematic deletion analysis of the first intron of the mouse type II collagen gene (Col2a1) using transient expression experiments to determine which segments stimulated expression of a luciferase reporter gene in RCS cells but not in 10T1/2 fibroblasts. Cloning of two tandem copies of a 156-base pair (bp) intron 1 fragment (+2188 to +2343) in a construction containing a 314-bp Col2a1 promoter caused an almost 200-fold increase in promoter activity in RCS cells but no increase in 10T1/2 cells. DNase I footprint analysis over this 156-bp fragment revealed two adjacent protected regions, FP1 and FP2, located in the 3'-half of this segment, but no differences were seen with nuclear extracts of RCS cells and 10T1/2 fibroblasts. Deletion of FP2 to leave a 119-bp segment decreased enhancer activity by severalfold, but RCS cell specificity was maintained. Further deletions indicated that sequences both in the 5' part of the 119-bp fragment and in FP1 were needed simultaneously for RCS cell-specific enhancer activity. A series of deletions in the promoter region of the mouse Col2a1 gene progressively reduced activity when these promoters were tested by themselves in transient expression experiments. However, these promoter deletions were all activated to a similar level in RCS cells by a 231-bp intron 1 fragment that included the 156-bp enhancer. The RCS cell-specific activity persisted even if the Col2a1 promoter was replaced by a minimal adenovirus major late promoter. This 231-bp intron 1 fragment also had strong enhancing activity in transiently transfected mouse primary chondrocytes. Our experiments establish the usefulness of RCS cells as an experimental system for studies of the control of chondrocyte-specific genes, provide an extensive delineation of segments in the Col2a1 first intron involved in chondrocyte-specific activity, and show that promoter sequences are dispensable for chondrocyte specificity.