Intracardiac fibroblasts (mesenchymal cells) of Hamburger and Hamilton stage 36 chick heart reside in the epicardium and atrioventricular valves. The characteristics of the epicardial fibroblasts include segregation from the myocytes of the heart wall myocardium, voluminous extracellular matrix production, and some cell proliferation activity. The atrioventricular fibroblasts intermingle with myocytes at the mutual border between these tissues, produce smaller amounts of extracellular matrix, and show very active cell proliferation. Is the behavior of each population of fibroblasts predetermined or is each responding in a reversible fashion to local environment? A cell aggregate culture system, which permits 3-dimensional cell-cell and cell-matrix interactions, is used to study the behavior of each isolated population of fibroblasts in vitro. In the presence of serum-free medium, each population produces very little extracellular matrix, has relatively low mitotic activity, and does not segregate from myocytes when the aggregate is composed of randomly intermixed myocytes and fibroblasts. In the presence of chicken serum, each population increases matrix production, increases cell proliferation, and sorts from myocytes. Thus, we suggest that the two populations of fibroblasts in the developing heart are responding to local environments and the differences observed in vivo are not the consequence of irreversible states of cellular differentiation.