Retinoic acid (RA) is known to play a role in various aspects of skeletal development in vivo, including morphogenesis, growth plate maturation, and apoptosis. In cell culture, RA treatment of chondrocytes suppresses the differentiated phenotype characterized by production of type II collagen and aggrecan. In an effort to discover molecules involved in regulation of the chondrocyte phenotype or related to developmental processes such as chondrogenesis, mRNAs from bovine chondrocytes cultured with and without RA were amplified by reverse transcription-polymerase chain reaction (PCR) and compared by differential display. PCR products whose expression was inhibited by RA treatment were cloned. One cDNA encodes a molecule we call cartilage- derived retinoic acid-sensitive protein (CD-RAP), and its properties are described here. The full-length bovine CD-RAP mRNA was cloned after amplification by the rapid amplification of cDNA ends procedure, and a part of the rat CD-RAP mRNA was amplified by reverse transcription-PCR using sequence-specific primers. The bovine CD-RAP mRNA contains an open reading frame of 130 amino acids. CD-RAP mRNA expression, as determined by Northern blot analysis and in situ hybridization, was present only in cartilage primordia and cartilage. The inhibition of CD-RAP mRNA expression by RA in vitro was time- and dose-dependent and was tested over concentrations from 10-8 to 10-6 M. Southern blot analysis of genomic DNA indicated that CD- RAP was encoded by a single copy gene and that no other genes were closely related. What appears to be the human homologue of CD-RAP was recently isolated and cloned from a melanoma cell line and shown to function as a growth inhibitory protein (Blesch, A., Boberhoff, A.-K., Apfel, R., Behl, C., Hessdoerfer, B., Schmitt, A., Jachimcza, P., Lottspeich, F., Buettner, R., and Bogdahn, U. (1994) Cancer Res. 54, 5695-5701). Neither CD-RAP nor this protein showed any homology to known proteins. We speculate that, in vivo, CD-RAP functions during cartilage development and maintenance.