Endochondral ossification in growth plates proceeds through several consecutive steps of late cartilage differentiation leading to chondrocyte hypertrophy, vascular invasion, and, eventually, to replacement of the tissue by bone. The subchondral vascular system is essential for this process and late chondrocyte differentiation is subject to negative control at several checkpoints. Endothelial cells of subchondral blood vessels not only are the source of vascular invasion accompanying the transition of hypertrophic cartilage to bone but also produce factors overruling autocrine barriers against late chondrocyte differentiation. Here, we have determined that the action of proteases secreted by endothelial cells were sufficient to derepress the production of the hypertrophy-markers collagen X and alkaline phosphatase in arrested populations of chicken chondrocytes. Signalling by thyroid hormones was also necessary but endothelial factors other than proteinases were not. Negative signalling by PTH/PTHrP- or TGF-beta -receptors remained unaffected by the endothelial proteases whereas signalling by FGF-2 did not suppress, but rather activated late chondrocyte differentiation under these conditions. A finely tuned balance between chondrocyte-derived signals repressing cartilage maturation and endothelial signals promoting late differentiation of chondrocytes is essential for normal endochondral ossification during development, growth, and repair of bone. A dysregulation of this balance in permanent joint cartilage also may be responsible for the initiation of pathological cartilage degeneration in joint diseases. (C) 2001 Elsevier Science B.V./International Society of Matrix Biology. All rights reserved.