In articular chondrocytes, the inflammatory cytokine tumor necrosis factor-α (TNF-α) induces the expression of bone morphogenetic protein-2 (BMP-2), a growth factor known to be involved in the induction of cartilage and bone. A study was performed to clarify the mechanism(s) underlying the induction of BMP-2 in chondrogenic ATDC5 cells and primary cultured adult human articular chondrocytes. In ATDC5 cells, the endogenous BMP-2 expression was consistently low throughout the process of chondrogenic differentiation, and TNF-α induced BMP-2 expression only after the cells acquired the chondrogenic phenotype. The results of nuclear run-off assay and cycloheximide treatment consistently indicated that ATDC5 cells acquire the capacity to synthesize BMP-2 mRNA in the nuclei during the differentiation process. In an attempt to explain the discrepancy between the active nuclear mRNA synthesis and the observed low expression level in differentiated ATDC5 cells, the stability of BMP-2 mRNA was evaluated, and the cells were found to regulate the expression of BMP-2 at the post-transcriptional level. Human chondrocytes were confirmed to have a similar post-transcriptional regulation. The result of 3′-rapid amplification of cDNA end revealed that both human and mouse BMP-2 mRNAs contain multiple pentameric AUUUA motifs in a conserved manner in the 3′-untranslated regions, and transient transfection experiments demonstrated that TNF-α increases the stability of BMP-2 mRNA through the pentameric motifs. Further experiments revealed that TNF-α modulates mRNA stability via p38 signal transduction pathway, whereas the cytokine also augmented the expression of BMP-2 through transcriptional up-regulation via the transcriptional factor NF-κB.