Osteogenic protein-1 (OP-1), a member of the TGF-beta family of proteins, induces endochondral bone formation. Here we studied the effect of OP-1 on the development of primary cultures of avian growth plate (GP) chondrocytes in either serum-free or serum-containing medium, in the absence or presence of retinoic acid (RA). OP-1 was added on day 7 of culture and continued for 7 days, or until the cultures were harvested, typically on day 21. Alone, OP-1 caused approximately 2-fold increase in proteoglycan synthesis into both the medium and the cell:matrix layer. Additionally, OP-1 caused a dosage-dependent increase in alkaline phosphatase (ALP) activity, and an increase in protein, when given from days 7-14 and examined on day 14. This stimulation was greater in cells grown in serum-free than in serum-containing media (3-5-fold vs. 2-3-fold increase in ALP; approximately 40% vs. approximately 20% increase in protein). Such stimulation of ALP activity and proteoglycan (PG) synthesis in cultured GP cells indicates that OP-1 elicits differentiation of chondrocytes. OP-1 minimally affected cell division (DNA content); however, a slight increase was seen when examined early in the culture. Alone, OP-1 increased mineral (Ca and Pi) content of the cultures by approximately 2-fold in both types of media. As early as day 14, clusters of mineral encircled many of the OP-1 treated cells. Thus, as in vivo, OP-1 strongly promoted mineral formation by the cultured GP chondrocytes. When present together, OP-1 and RA generally blocked the action of the other. Separately OP-1 and RA each stimulated protein synthesis, ALP activity, and Ca2+ deposition; together they were inhibitory to each. Also, RA blocked the stimulation of PG synthesis induced by OP-1; whereas OP-1 decreased cell division engendered by RA. Thus, this GP chondrocyte culture system is a good model for studying factors that influence differentiation and mineral deposition during bone growth in vivo.