From studies of isolated cartilage proteoglycans in solution it has been inferred that they occur in the tissue as aggregates of high molecular weight which consist of proteoglycan monomers, hyaluronic acid and specific link proteins. The present investigation provides direct evidence for the existence of hyaluronic acid-containing aggregates in vivo, as indicated by the following observations: Treatment of sections of coastal cartilage from newborn rabbits with Streptomyces hyaluronidase led to complete disappearance of the electron dense granules, which have been previously identified as chondroitin sulfate proteglycans, from the extracellular matrix. Similar results were obtained on digestion with leech hyaluronidase which, like the Streptomyces enzyme, specifically degrades hyaluronic acid. Proteoglycan aggregation occurs not only in the extracellular compartment but intracellularly as well, since a portion of the hyaluronidase-senstive, electron dense proteoglycan granules are found in intracellular vesicles. It is concluded that the ability of proteoglycan monomers to form aggregates is a true reflection of the in vivo organization of these molecules and that aggregate formation is an important factor in the maintenance of the normal physiological function of cartilage tissue.