Elevated levels of fibronectin (Fn) in articular cartilage have been linked to the progression of both rheumatoid and osteoarthritis. In this study, we examined intracellular events which follow ligation of Fn to its receptor, the integrin alpha5beta1. In addition, we examined the regulatory influence of nitric oxide on these events, since this free radical has been implicated in cartilage degradation. Exposure of chondrocytes to Fn-coated beads resulted in the circumferential clustering of the alpha5beta1 integrin receptor, which was accompanied by the subplasmalemmal assembly of a focal activation complex comprised of F-actin, the tyrosine kinase, focal adhesion kinase (FAK), the ras related G protein rho A, as well as tyrosine-phosphorylated proteins. Treatment with exogenous nitric oxide (NO) or catabolic cytokines which induce nitric oxide synthase blocked the assembly of F-actin, FAK, rho A and tyrosine-phosphorylated proteins while not affecting the total number of beads bound per cell nor the clustering of alpha5beta1 integrin. Use of a cGMP antagonist (Rp-8-Br cGMPS) or cGMP agonist (Sp-cGMPS) either abolished or mimicked the NO effect, respectively. Adherence of chondrocytes to fibronectin enhanced proteoglycan synthesis by twofold (vs. albumin). In addition, basic fibroblast growth factor (FGF) and insulin growth factor (IGF-1) induced proteoglycan synthesis in chondrocytes adherent to Fn but not albumin suggesting a costimulatory signal transduced by alpha5betal and the FGF receptor. Both constitutive and FGF stimulated proteoglycan synthesis were completely inhibited by nitric oxide. These data indicate that the ligation of alpha5beta1 in the chondrocyte induced the intracellular assembly of an activation complex comprised of the cytoplasmic tail of alpha5beta1 integrin, actin, and the signaling molecules rho A and FAK. We show that NO inhibits the assembly of the intracellular activation complex and the synthesis of proteoglycans, but has no effect on the extracellular aggregation of alpha5beta1 integrin. These observations provide a basis by which nitric oxide can interfere with chondrocyte functions by affecting chondrocyte-matrix interactions.