The embryonic skull bone, the calvarium, develops via intramembranous ossification, whereby mesenchymal cells differentiate directly into osteoblasts. However, under certain conditions, such as systemic calcium deficiency, regions of cartilage-like tissue are observed in the chick embryonic calvarium, suggesting the presence of pre-cartilage cells. We have recently identified and isolated a chondrogenic cell subpopulation from chick embryonic calvarium by Percoll gradient centrifugation. Using peanut agglutinin (PNA), which has been shown to bind specifically to chondroprogenitor cells in various developing skeletal elements, we have further examined the chondrogenic characteristics of calvarial cells. Histochemical staining of calvaria sections showed the presence of PNA-binding cells in subcambial regions of the calvarium as a function of embryonic development and calcium status. PNA-binding activity was also used as the basis for affinity chromatography fractionation of calvarial cells isolated from normal and calcium-deficient, shell-less chick embryos. A higher percentage of calvarial cells from the normal embryo bound PNA than those from shell-less embryos. Interestingly, more PNA-binding cells were found in the dense, chondrogenic fractions obtained by prior Percoll gradient fractionation of calvarial cells. The chondrogenic potential of the PNA affinity fractionated cells was assessed in culture based on alcian blue staining, and expression of collagen type II and aggrecan core protein. PNA-binding cells isolated from total calvarial cells and from the dense Percoll fractions exhibited a prominent chondrocyte-like phenotype, and were organized in alcian blue-stained nodules, which immunostained positively for collagen type II and aggrecan. Expression of collagen type II was also detected at the mRNA level by means of coupled reverse transcription/polymerase chain reaction. On the other hand, non-PNA-binding cells, isolated from total calvarial cells and from the lighter Percoll fractions, were primarily fibroblastic in appearance and did not express cartilage-associated characteristics. The presence of distinct PNA-binding cells with chondrogenic potential strongly suggests that these cells may be functionally important in morphogenesis of the embryonic calvarium.