A number of studies suggest that several members of the transforming growth factor-beta (TGF-beta) family of peptide growth factors may be involved in the regulation of cartilage differentiation. It has been previously reported that TGF-beta 1 and TGF-beta 2 promote the chondrogenic differentiation of chick limb mesenchymal cells in high density micromass cultures (Kulyk et al. [1989a] Dev. Biol. 135:424-430). In this study we report that chick limb mesenchymal cells express mRNA for chicken TGF-beta 1, TGF-beta 2, and TGF-beta 3 during cartilage differentiation in vitro. In addition, the time course of their expression during cartilage differentiation is consistent with their playing a role in the initiation of this differentiation process. We also report that two members of the TGF-beta family, TGF-beta 3 and bone morphogenetic protein-2 (BMP-2), are capable of promoting the accumulation of cartilage extracellular matrix molecules by differentiating chick limb mesenchymal cells in micromass culture. Significant differences, however, were noted between the specific effects on matrix production elicited by these two growth factors which suggest that they may be acting by distinct mechanisms to regulate cartilage matrix production. TGF-beta appears to be most effective on cells which have not yet undergone cell condensation, a critical event in early cartilage differentiation, whereas BMP-2 is most effective after cells have condensed or differentiated. These observations suggest that TGF-beta 3 and BMP-2 may be acting in a sequential manner to regulate chick limb mesenchymal cells through the different stages of cartilage differentiation.