Skeletal muscle cells are a useful model for studying cell differentiation. Muscle cell differentiation is marked by myoblast proliferation followed by progressive fusion to form large multinucleated myotubes that synthesize muscle-specific proteins and contract spontaneously. The molecular analysis of myogenesis has advanced with the identification of several myogenic regulatory factors, including myod1, myd, and myogenin. These factors regulate each other's expression and that of muscle-specific proteins such as the acetylcholine receptor and acetylcholinesterase (AChE). In order to investigate the role of extracellular matrix (ECM) in myogenesis we have cultured myoblasts (C2C12) in the presence or absence of an exogenous ECM (Matrigel). In addition, we have induced differentiation of myoblasts in the presence or absence of Matrigel and/or chlorate, a specific inhibitor of proteoglycan sulfation. Our results indicated that the formation of fused myotubes and expression of AChE was stimulated by Matrigel. Treatment of myoblasts induced to differentiate with chlorate resulted in an inhibition of cell fusion and AChE activity. Chlorate treatment was also found to inhibit the deposition and assembly of ECM components such fibronectin and laminin. The expression of myogenin mRNA was observed when myoblasts were induced to differentiate, but was unaffected by the presence of Matrigel or by culture of the cells in the presence of chlorate. These results suggest that the expression of myogenin is independent of the presence of ECM, but that the presence of ECM is essential for the formation of myotubes and the expression of later muscle-specific gene products.