The mechanism of interaction of hyaluronate with the surface of cells from embryonic chick limbs was studied using cell cultures of mesoderm from various developmental stages. The mode of interaction of hyaluronate with the cell surface changed at the onset of mesodermal cell condensation prior to differentiation of cartilage and muscle. At this time hyaluronate binding sites appeared on the cells and continued to be present on differentiated chondrocytes but not on myotubes. Direct measurement of hyaluronate binding was made using stage 24 mesodermal cells and membranes isolated from cells derived from various limb stages. The stage 24 cells and membranes from stage 22, 24, and 26 cells exhibited hyaluronate binding, but not membranes from stage 19 mesoderm cultures. At stage 38, membranes from chondrocyte cultures exhibited the highest hyaluronate binding, and membranes from myoblasts and fibroblasts intermediate binding, whereas membranes from myotube-enriched cultures lacked binding activity. No significant competition of hyaluronate binding by chondroitin sulfate was observed. Occupied hyaluronate binding sites were measured by the displacement of radiolabeled cell surface hyaluronate with exogenous, unlabeled hyaluronate. Very little hyaluronate was displaced from mesodermal cells derived from the youngest embryos, namely, stage 19 or stage 20-21. However, greater than 50% of cell surface hyaluronate was displaced from stage 22 and 24 mesodermal cells. The addition of exogenous hyaluronate to stage 26 mesoderm, the stage of onset of cartilage differentiation, and to stage 38 chondrocytes resulted in displacement of large proportions of both hyaluronate and chondroitin sulfate. Addition of exogenous chondroitin sulfate did not cause displacement of significant amounts of cell surface hyaluronate or chondroitin sulfate. These results indicate the presence and developmental modulation of specific binding sites for hyaluronate on limb cells during their differentiation.