Immortalized human chondrocytes were established by transfection of primary cultures of juvenile costal chondrocytes with vectors encoding simian virus 40 large T antigen and selection in suspension culture over agarose. Stable cell lines were generated that exhibited chondrocyte morphology, continuous proliferative capacity (> 80 passages) in monolayer culture in serum-containing medium, and expression of mRNAs encoding chondrocyte-specific collagens II, IX, and XI and proteoglycans in an insulin-containing serum substitute. They did not express type X collagen or versican mRNA. These cells synthesized and secreted extracellular matrix molecules that were reactive with monoclonal antibodies against type II collagen, large proteoglycan (PG-H, aggrecan), and chondroitin-4- and chondroitin-6-sulfate. Interleukin-1 beta (IL-1 beta) decreased the levels of type II collagen mRNA and increased the levels of mRNAs for collagenase, stromelysin, and immediate early genes (egr-1, c-fos, c-jun, and jun-B). These cell lines also expressed reporter gene constructs containing regulatory sequences (-577/+3,428 bp) of the type II collagen gene (COL2A1) in transient transfection experiments, and IL-1 beta suppressed this expression by 50-80%. These results show that immortalized human chondrocytes displaying cartilage-specific modulation by IL-1 beta can be used as a model for studying normal and pathological repair mechanisms.