Cells dispersed from the chondrocranial portions of fetal rat calvaria proliferated and performed specialized functions during primary culture in a chemically defined medium. Mature cultures were typified by multilayered clusters of redifferentiating cartilage cells. Flattened cells that lacked distinguishing features occupied areas between the clusters. Alkaline phosphatase-enriched, ultrastructurally typical chondrocytes within the clusters were encased in a dense extracellular matrix that stained prominently for chondroitin sulfate proteoglycans. This matrix contained fibrils measuring 19 nm in diameter, which were associated with proteoglycan granules that preferentially bound ruthenium red. A progressive increase in the number of cells indicated the proliferation of certain elements in the primary culture. The cells in primary culture were biochemically as well as morphologically heterogeneous since they were found to synthesize type I and type II collagens. Homogeneous populations of redifferentiated chondrocytes were recovered as floating cells and were shown to express the chondrocyte phenotype in secondary culture. Subcultured cells synthesized type II collagen and its precursor almost exclusively and incorporated 35SO4 into proteoglycan monomer and aggregates to a greater degree than the cells in primary culture. The pattern of proteoglycan monomer and aggregate labeling resembled that of intact cartilage segments and bovine articular chondrocytes. Skin fibroblasts harvested from the same rat fetuses failed to proliferate when maintained under identical conditions. Hence, exogenous hormones, growth factors, and protein are not required for chondrocyte growth and maturation.