Mesodermal cells in the developing chick embryo limb bud appear morphologically homogeneous until stage 21. At stage 22 the prechondrogenic and premyogenic areas begin to condense, culminating in the appearance of cartilage and muscle by stage 25-26. We have examined changes in the hyaluronate-dependent pericellular matrices elaborated by mesodermal cells of the limb bud from different developmental stages and the corresponding changes in production of cell surface-associated and secreted glycosaminoglycans. When placed in culture, most early mesodermal cells (stage 17 lateral plate and stage 19 limb bud) exhibited pericellular coats as visualized by the exclusion of particles. These coats were removed by treatment of the cultures with Streptomyces hyaluronidase. Cells from stage 20-21 limb buds (precondensation) had smaller coats, whereas cells derived from stage 22, 24, and 26 limb buds (condensed chondrogenic and myogenic regions) lacked coats. However, coats were reformed during subsequent cytodifferentiation of chondrocytes; chondrocytes from stage 28 and 30 limb buds, and more mature chondrocytes from stage 38 tibiae, had pericellular coats. Thus, cytodifferentiation of cartilage is accompanied by extensive intercellular matrix accumulation in vivo and reacquisition of pericellular coats in vitro. Although their structure was still dependent on hyaluronate, chondrocyte coats were associated with increased proteoglycan content compared to the coats of early mesodermal cells. The amount of incorporation of [3H]acetate into cell surface hyaluronate remained relatively constant from stages 17 to 38, whereas in the medium compartment, incorporation into hyaluronate was more than 4-fold greater by stage 17 and 19 mesodermal cells than by cells from stages between 20 and 38. However, there was a progressive increase in incorporation into cell surface and medium chondroitin sulfate throughout these developmental stages. Thus, at the time of cellular condensation in the limb bud in vivo, we have observed a reduction in size of hyaluronate-dependent pericellular coats and a dramatic change in the relative proportion of hyaluronate and chondroitin sulfate produced by the mesodermal cells in vitro.