Differentiation of mouse embryonic stem (ES) cells via embryoid bodies was established as a suitable model to study development in vitro. Here, we show that differentiation of ES cells in vitro into chondrocytes can be modulated by members of the transforming growth factor-β family (TGF-β₁, BMP-2 and -4). ES cell differentiation into chondrocytes was characterized by the appearance of Alcian blue-stained areas and the expression of cartilage- associated genes and proteins. Different stages of cartilage differentiation could be distinguished according to the expression pattern of the transcription factor scleraxis, and the cartilage matrix protein collagen II. The number of Alcian-blue-stained areas decreased slightly after application of TGF-β₁, whereas BMP-2 or -4 induced chondrogenic differentiation. The inducing effect of BMP-2 was found to be dependent on the time of application, consistent with its role to recruit precursor cells to the chondrogenic fate. (C) 2000 Elsevier Science Ireland Ltd.