The matrix formed by adult human chondrocytes in alginate beads is composed of two compartments: a thin rim of cell-associated matrix that corresponds to the pericellular and territorial matrix of articular cartilage and a more abundant further-removed matrix, the equivalent of the interterritorial matrix in the tissue. On day 30 of culture, the relative and absolute volumes occupied by the cells and each of the two matrix compartments in the beads were nearly identical to those in native articular cartilage. Furthermore, the concentration of aggrecan in the cell-associated matrix was similar to that in adult human articular cartilage and was approximately 40-fold higher than in the further removed matrix compartment. Fluorescence-activated cell sorting revealed that the cell-associated matrix was built on the cell membrane in part via interactions between hyaluronic acid and CD44-like receptors. Approximately 25% of the aggrecan molecules synthesized by the chondrocytes during a 4-h pulse in the presence of [35S]sulfate on day 9 of culture were retained in the cell-associated matrix where they turned over with a half-life (t1/2) = 29 days. Most [35S]aggrecan molecules reached the further removed matrix compartment where they turned over much more slowly (t1/2 > 100 days). These results add support to the contention that aggrecan molecules residing in the pericellular and territorial areas of the adult human articular cartilage matrix are more susceptible to degradation by proteolytic enzymes synthesized by the chondrocytes than those that inhabit the interterritorial areas further removed from the cells.