TGF-beta has been shown to be one of the most important regulators in chondrogenesis and osteogenesis. Daily subperiosteal injection of TGF-beta, which was extracted and purified from bovine platelets, into adult mouse femur resulted in proliferation and differentiation of the mesenchymal cells, chondrogenesis, and endochondral osteogenesis. After cessation of the injection, the endochondral ossification occurred widely, resulting in replacement of the cartilage with new bone. These phenomena demonstrate that exogenous TGF-beta stimulates mesenchymal proliferation and differentiation that occur in early fracture healing and suggest the possibility of clinical application of TGF-beta for fracture repair and bone transplantation.