We have expressed and biologically characterized recombinant human growth/differentiation factor 5 (huGDF5). This protein is composed of a mature homodimer consisting of 15 kD subunits. Using recombinant expressed protein, we have demonstrated that huGDF5 in vitro stimulated mesenchyme aggregation and chondrogenesis in rat limb bud cells. In vivo, partially purified huGDF5 induced cartilage and bone formation in muscular tissues of rodents. However, in contrast to the effects of other BMPs, as for example BMP-2, the osteoblastic MC3T3-E1 cells did not respond to huGDF5 as measured by alkaline phosphatase activity. These results suggest that the action of GDF5 may be relatively specific for chondrogenesis during the entire process of the endochondral bone formation. GDF5 may control the morphogenesis of cartilaginous tissue, including joints, in the skeletal development of limbs.