To explore the possible role of transforming growth factor alpha (TGF-alpha) in craniofacial development, its expression in the craniofacial region of rat embryos from embryonic day (d) 9 to d 20 was examined by in situ hybridisation and immunostaining. The TGF-alpha transcripts were first detected in the neural fold of embryonic d 9 and 10 embryos. In the craniofacial region, the TGF-alpha transcripts were not detected until embryonic d 16 in mesenchyme surrounding the olfactory bulb, within the olfactory bulb, the nasal capsule, vomeronasal organ, and vibrissal follicle. In addition, TGF-alpha message was detected in mesenchyme in the vicinity of Meckel's cartilage, and in the dental epithelium and lamina. This expression pattern of TGF-alpha transcripts persisted until embryonic d 17 but disappeared by d 18. The presence of TGF-alpha protein largely coincided with TGF-alpha message although, unlike the message, it persisted throughout later embryogenesis in the craniofacial region. The possible function of TGF-alpha in chondrogenesis was explored by employing the micromass culture technique. Cartilage nodule formation in mesenchymal cells cultured from rat mandibles in the presence of TGF-alpha was significantly inhibited. This inhibitory effect of TGF-alpha on chondrogenesis was reversed by addition of antibody against the EGF receptor, which crossreacts with the TGF-alpha receptor. The inhibitory effect of TGF-alpha on chondrogenesis in vitro was further confirmed by micromass culture using mesenchymal cells from rat embryonic limb bud. Taken together, these results demonstrate the involvement of TGF-alpha in chondrogenesis during embryonic development, possibly by way of a specific inhibition of cartilage formation from mesenchymal precursor cells.