To determine the role of fibroblast growth factor (FGF)⅐FGF receptor (FGFR) signaling in chondrogenesis, we analyzed the gene expression of alternatively spliced FGFRs during chondrogenic differentiation of ATDC5 cells in vitro. Two isoforms of FGFR3 were expressed in these cells. One was the complete form of FGFR3 (FGFR3) already reported, and the other was a novel one that lacks the acid box domain (FGFR3⌬AB). The gene of FGFR3⌬AB was expressed in undifferentiated ATDC5 cells. In contrast, the transcripts of FGFR3 were not detectable in undifferentiated cells but increased during cellular condensation, which is an obligatory step for chondrogenic differentiation. FGFR1 and FGFR2 expression was higher than that of FGFR3 in undifferentiated cells. The gene expression of cell cycle inhibitor p21 was induced during cell condensation and correlated best with the expression of FGFR3 among the FGFR isoforms expressed. The differential expression of FGFR3 isoforms during chondrogenesis suggests that these isoforms may play different roles in the regulation of growth and differentiation in chondrocytes. To define the mitogenic response of FGFR3⌬AB and FGFR3 to FGFs, their cDNAs were stably transfected into mouse BaF3 pro-B cells. FGFR3 preferentially mediates the mitogenic response to FGF1 and poor response to FGF2. In contrast, FGFR3⌬AB mediated a higher mitogenic response to FGF2 as well as to FGF1. In addition, FGFR3⌬AB responds to FGF1 at lower concentrations of heparin than FGFR3 does. These results suggest that the acid box plays an important role in the regulation of FGFR3 to mediate biological activities in response to FGFs.