Lateral plate mesoderm is native to the developing limb while other cells such as neurons extend migratory axonal processes from the neural tube. Questions regarding how axons migrate to their proper location in the developing limb remain unanswered. Extracellular matrix molecules expressed in developing limb cartilages, such as the versican proteoglycan, may function as inhibitory cues to nerve migration, thus facilitating its proper patterning. In the present study, a method is described for co-culture of neural tissue with high density micromass preparations of mouse limb mesenchyme in order to investigate neurite patterning during limb chondrogenesis in vitro. Comparison of hdf (heart defect) mouse limb mesenchyme, which bears an insertional mutation in the versican proteoglycan core protein, with wild type demonstrated that the described technique provides a useful method for transgenic analysis in studies of chondrogenic regulation of neurite patterning. Differentiating wild type limb mesenchyme expressed cartilage characteristic Type II collagen and versican at 1 day and exhibited numerous well defined cartilage foci by 3 days. Wild type neurites extended into central regions of host cultures between 3 and 6 days and consistently avoided versican positive chondrogenic aggregates. Wild type neural tubes cultured with hdf limb mesenchyme, which does not undergo cartilage differentiation in a wild type pattern, showed that axons exhibited no avoidance characteristics within the host culture. Results suggest that differentiating limb cartilages may limit migration of axons thus aiding in the ultimate patterning of peripheral nerve in the developing limb.