Articular chondrocytes progressively undergo dedifferentiation into a spindle-shaped mesenchymal cellular phenotype in monolayers. Chondrocyte dedifferentiation is stimulated by retinoic acid. On the other hand, bone morphogenic proteins (BMPs) stimulate differentiation of chondrocytes. We examined the mechanism of effects of BMP in chondrocyte differentiation with use of a recombinant adenovirus vector system. Constitutively active forms of BMP type 1 receptors (BMPR-IA and BMPR-IB) and those of activin receptor-like kinase (ALK)-1 and ALK-2 maintained differentiation of chondrocytes in the presence of retinoic acid. The BMP receptor-regulated signaling substrates, Smad1/5, weakly induced chondrocyte differentiation; the effects of Smad1/5 were enhanced by BMP-7 treatment. Inhibitory Smad, Smad6, blocked increase of expression of chondrocyte markers by BMP-7 in a dose-dependent manner. SB202190, a p38 mitogen-activated protein kinase inhibitor, inhibited this effect of BMP-7; however, since SB202190 suppressed phosphorylation of Smad1/5, this may be due to blockade of BMP receptor activation. These results together strongly suggest that induction of chondrocyte differentiation by BMP-7 is regulated by Smad pathways. (C) 2003 Elsevier Science (USA). All rights reserved.