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Rabbit articular chondrocytes maintained in monolayer, synthesized and secreted a 46 kDa protein into the culture medium. N-terminal sequence analysis and immunoprecipitation of the radiolabeled material revealed this protein to be osteonectin (ON)/SPARC, a protein previously shown to be present in bone. When chondrocytes were exposed to interleukin-1, a cytokine with matrix degradative properties, ON synthesis and secretion was greatly inhibited. However, this was specific to IL-1 since two other pro-inflammatory cytokines (tumor-necrosis factor-alpha and interleukin-6) with properties similar to IL-1, failed to cause any discernible effect on ON synthesis. Several growth factors (TGF-beta, PDGF, and IGF-1), that have been shown to stimulate other cartilage matrix macromolecular synthesis, also stimulated ON synthesis and were also able to reverse the inhibitory effect of IL-1 on ON synthesis. These observations were also demonstrated in explant cultures of cartilage. Our studies suggest that ON is a biosynthetic product of articular cartilage and could play a role in cartilage structure and/or function.