Neutral proteoglycanase and other protease activity from cellular and CM fractions of monolayer-cultured rabbit articular chondrocytes were studied. The cellular fraction comprising soluble cytoplasmic enzymes possessed concentration-dependent elastase-like esterase activity and activity against trypsin and chymotrypsin synthetic substrates but had little caseinase activity. The 20% ammonium sulfate precipitate of CM possessed more neutral caseinase activity than the 60% ammonium sulfate precipitate and the bulk of activity against the synthetic substrates. Activity against bovine nasal septum PG was present in these fractions. Both the 20% and 60% ammonium sulfate fractions reduced the viscosity and the S of the PG substrate. This activity was incompletely inhibited by preincubation with either 5 mM o-phenanthroline or 10 mM EDTA, indicating that it was paritally metal-dependent. The activity in the cellular fraction was also partially inhibited by o-phenanthroline but more so by EDTA. These data indicate that chondrocytes synthesize and secrete into the culture medium neutral proteoglycanase(s) capable of initiating degradation of PG derived from the neutral pH cartilage matrix. The inhibitory profiles, together with recent evidence of enzymes with similar activity extracted from cartilage suggested that the proteoglycanase enzyme(s) may occur in multiple forms.