Chondrogenic differentiation by mesenchymal progenitor cells (MPCs) is associated with cytokines such as transforming growth factor-beta 1 (TGF-β1) and dexamethasone. Extracellular matrix (ECM) also regulates the differentiation by MPCs. To define whether ECM plays a functional role in regulation of the chondrogenic differentiation by MPCs, an in vitro model was used. That model exposed to dexamethasone, recombinant human TGF-β1(rhTGF-β1) and collagens. The results showed that MPCs incorporated with dexamethasone and rhTGF-β1 increased proliferation and expression of glycosaminoglycan (GAG) after 14 days. Type II collagen enhanced the GAG synthesis, but did not increase alkaline phosphatase (ALP) activity. When adding dexamethasone and rhTGF-β1 MPCs increased mRNA expression of Sox9. Incorporation with type II collagen, dexamethasone and rhTGF-β1, MPCs induced mRNA expression of aggrecan and enhanced levels of type II collagen, and Sox9 mRNA. In contrast, incorporation with type I collagen, dexamethasone and rhTGF-β1 MPCs reduced levels of aggrecan, and Sox9 mRNA, and showed no type II collagen mRNA. Altogether, these results indicate that type I and II collagen, in addition to the cytokine effect, may play a functional role in regulating of chondrogenic differentiation by MPCs. © 2004 Orthopaedic Research Society. Published by Elsevier Ltd. All rights reserved.