Differentiation of hypertrophic chondrocytes to an osteoblast-like phenotype occurs in vivo in the hypertrophic cartilage of chick embryo tibiae underneath early or prospective periosteum and in cartilage around vascular canals. Synthesis of type I collagen by hypertrophic chondrocytes was shown by immunolocalization of the C propeptide. By enzyme cytochemistry it was instead shown that, in vivo, further differentiating hypertrophic chondrocytes express alkaline phosphatase at the time of initial mineral deposition. Evidence that hypertrophic chondrocytes may resume proliferation was obtained by BrdU labeling. A monoclonal antibody (LA5) was isolated and characterized that recognizes a hypertrophic chondrocyte membrane protein. In addition to staining hypertrophic chondrocytes surrounded by a type II and type X collagen-stainable matrix, the LA5 antibodies also stained elongated chondrocytes at the cartilage/bone collar interface and cells incorporated in the first layer of bone and osteoid matrix.