gonzo (goz) is a zebrafish mutant with defects in cartilage formation. The goz phenotype comprises cartilage matrix defects and irregular chondrocyte morphology. Expression of endoderm, mesoderm, and cartilage marker genes is, however, normal, indicating a defect in chondrocyte morphogenesis. The mutated gene responsible for the goz phenotype, identified by positional cloning and confirmed by phosphomorpholino knockdown, encodes zebrafish site-1 protease (s1p). S1P has been shown to process and activate sterol regulatory element-binding proteins (SREBPs), which regulate expression of key enzymes of lipid biosynthesis or transport. This finding is consistent with the abnormal distribution of lipids in goz embryos. Knockdown of site-2 protease, which is also involved in activation of SREBPs, results in similar lipid and cartilage phenotypes as S1P knockdown. However, knockdown of SREBP cleavage-activating protein, which forms a complex with SREBP and is essential for S1P cleavage, results only in lipid phenotypes, whereas cartilage appears normal. This indicates that the cartilage phenoptypes of goz are caused independently of the lipid defects.T he vertebrate skeleton is comprised of cartilage and bone and is derived from multiple embryologic origins, including neural crest, dorsal paraxial mesoderm, cephalic mesoderm, and lateral mesoderm (for review, see ref. 1). Skeletal development in the vertebrate head is regulated by sonic hedgehog (Shh) (2-5), which is expressed in the rostral axial mesendoderm and the prechordal plate (6). The coexpression of shh and bone morphogenetic proteins (bmps) observed in many developing vertebrate organs suggests a closely regulated relationship between Shh and BMPs (7). It has been shown that BMP-4 induces sox9 and collagen II (Col II) expression and leads to chondrogenesis in mandibular organ culture systems of chick and mouse (8).Mature cartilage consists of chondrocytes and the surrounding extracellular matrix. Matrix collagens and proteoglycans are synthesized by chondrocytes. They are hydroxylated, glycosylated, and proteolytically cleaved in the secretory pathway and further processed and assembled into cartilage matrix at the cell surface (9). Large complexes of proteoglycans are restricted in their mobility and swelling by a network of Col II and XI fibrils of high tensile strength. Interactions between the extracellular matrix and chondrocytes have been shown to be essential for cartilage development (10), and mutations in collagen genes can cause human chondrodysplasias (11,12).In addition to protein factors, lipids play an essential role in cartilage development. Deficiencies in cholesterol metabolism during embryogenesis can lead to severe skeletal abnormalities like Smith-Lemli-Opitz syndrome (for review, see ref. 13 and references therein). Similar chondrodysplasias have been observed in other vertebrates, including zebrafish (14, 15), in which the molecular mechanisms of skeletal development are conserved, including the roles of shh (16), patched (ptc) (17), bmp-...