The relationship between replication and the synthesis of matrix sulfated proteoglycans was investigated with fetal rat chondrocytes grown in monolayer culture. The effect of N6 O2' dibutyryl adenosine 3', 5' cyclic monophosphate (DBcAMP), adenosine 3', 5' cyclic monophosphate (cAMP), 8 Bromo adenosine 3', 5' cyclic monophosphate (8 Br-cAMP), sodium butyrate and hydroxyurea was examined. Between 0.05 and 0.5 mM DBcAMP, a dose related inhibition of cell division and stimulation of [35SO=/4] incorporation into matrix proteoglycans was demonstrated. At the higher concentrations of DBcAMP, cell division was completely inhibited and the enhancement of [35SO=/4] incorporation into matrix proteoglycans ranged between 40 and 120% (P less than 0.01). Utilizing 14C-glucosamine and photometric determination of proteoglycans with Alcian Blue, it was demonstrated that the increase in sulfate incorporation reflected enhanced accumulation of extracellular matrix. The effects of DBcAMP were mimicked by 8 Br-cAMP, suggesting they were mediated by the adenylyl cyclase system. cAMP (0.05-0.5 mM), sodium butyrate (0.1-0.5 mM) and hydroxyurea (0.5-5 mM) partially or fully inhibited cell division, but either failed or only slightly enhanced sulfate incorporation. The enhanced sulfated proteoglycan deposition promoted by DBcAMP began 8 to 12 hours after serum stimulation, its onset occurred prior to thymidine incorporation and the effect persisted for 28 hours. Determination of cell volume demonstrated an increase in size of DBcAMP treated chondrocytes between 8 to 12 hours, coincident with the onset of increased sulfate incorporation. These results are consistent with a model where matrix sulfated proteoglycan deposition by chondrocytes is mediated by intracellular cAMP levels and occurs in the G1 phase of the cell cycle.