The effect of transforming growth factor-beta (TGF-beta, 1 ng/ml) on proteoglycan synthesis by rabbit articular chondrocytes in culture was studied in the presence of fetal bovine serum. Exposure of confluent cells for 24 h to the factor resulted in a marked increase of 35S-labeled sulfate incorporation in the newly synthesized proteoglycans (PG), as estimated by glycosaminoglycan (GAG) radioactivity (+58%). The onset was observed 6 h after addition of the factor but was significant after 12 h. TGF-beta also enhanced the uptake of [35S]sulfate by chondrocytes, but had no effect on the release of PG by these cells. The effect of TGF-beta on the distribution of PG between the medium and the cell layer was shown to be dependent on the serum concentration in the medium: the relative proportion of cell-layer associated GAG of TGF-beta-treated cells decreased with increasing concentration of fetal bovine serum. The proportion of aggregated PG, the hydrodynamic size of PG monomers and GAG chains were not modified by TGF-beta, but the relative distribution of disaccharides 6- and 4-sulfate in GAG chains was altered by the factor: the proportion of chondroitin 6-sulfate (C6S) was decreased while that of chondroitin 4-sulfate (C4S) was augmented in presence of TGF-beta, leading to a decrease of the ratio C6S/C4S (-11 to -22%, P less than 0.01). The present study indicates that TGF-beta promotes the synthesis of a modified extracellular matrix in cultured articular chondrocytes. This mechanism could be relevant to some aspects of cartilage repair in osteoarticular diseases.