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The aim of this study was to investigate the effects of insulin-like growth factor-I, transforming growth factor-beta (TGF-beta), and interluekin-1 alpha (IL-1 alpha) on the deposition and degradation of a cartilage-like matrix in high-density pellet cultures of adult bovine chondrocytes. Proteoglycan was determined by toluidine blue staining and colorimetric assay. Type II collagen was determined by immunohistochemical staining and its unwinding in situ by a recently developed immunoassay. Bovine nasal chondrocytes cultured as pellets deposited a well-organized extracellular matrix of proteoglycan and type II collagen. Insulin-like growth factor-I (2-10 ng/ml) increased the synthesis and incorporation into the matrix of both these proteins. TGF-beta (2-10 ng/ml) also increased proteoglycan synthesis. However it inhibited proteoglycan deposition, presumably through increased degradation of the molecule, as shown by increased release of aggrecan fragments into the tissue culture medium. TGF-beta had no effect on type II collagen deposition. In pellet cultures of bovine nasal or articular chondrocytes, 20 ng/ml IL-1 alpha induced a significant degradation of both proteoglycan and type II collagen. The effect on collagen clearly involved proteolytic cleavage of its triple helix because there was an increase in the proportion of unwound type II collagen in the matrix, as well as a loss of total type II collagen. In explant cultures of intact bovine articular cartilage, incubation with 50 ng/ml IL-1 alpha stimulated significant degradation of the proteoglycan but no degradation of the type II collagen. These results demonstrate that although the articular chondrocytes are capable of degrading type II collagen when isolated, they do not do so in situ, presumably because of some inherent property of the mature extracellular matrix. This study demonstrates the utility of pellet cultures when investigating chondrocyte-mediated turnover of cartilage matrix and its modulation by cytokines and growth factors.