Mutations in the human cartilage oligomeric matrix protein (COMP) gene have been linked to the development of pseudoachondroplasia and multiple epiphyseal dysplasia. We previously cloned the promoter region of the COMP gene and delineated a minimal negative regulatory element (NRE) that is both necessary and sufficient to repress its promoter (Issack, P. S., Fang, C. H., Leslie, M. P., and Di Cesare, P. E. The differentiation of uncommitted mesenchymal cells into musculoskeletal tissues, including chondrocytes, osteoblasts, tenocytes, and ligament cells, is a fundamental molecular event of both embryonic development and repair of cartilage, ligament, tendon, and bone (1, 2). After commitment to the chondrocyte lineage, mesenchymal cells undergo condensation, cease expression of type I collagen, and differentiate into a chondrocytic phenotype characterized by expression of collagen types II, IX, and XI and the proteoglycan aggrecan (1, 2). During this process, there appears to be transition cells between type I collagen (expressing mesenchymal cells) and type II collagen (expressing chondrocytes) that are characterized by lack of expression of type II collagen and abundant expression of cartilage oligomeric matrix protein (COMP) 1 (3-11). These cells may represent musculoskeletal precursor cells that have the potential subsequently to differentiate into a variety of musculoskeletal cell types; however, little is known about the generation of these potential precursor cells.The gene for COMP encodes a pentameric non-collagenous matrix protein (3, 9, 10, 12, 13) that is expressed predominantly in articular cartilage (3, 9 -11, 14). Mutations in the human COMP gene have been linked to the development of pseudoachondroplasia and multiple epiphyseal dysplasia (15-27), autosomal dominant forms of short-limb dwarfism characterized by short stature, normal facies, epiphyseal abnormalities, and early onset osteoarthrosis (reviewed in . Accumulating evidence suggests that COMP may function to stabilize the extracellular matrix of articular cartilage by specific cation-dependent interactions with matrix components, including collagen types II and IX and fibronectin (31,32).COMP is synthesized by chondrocytes, osteoblasts, tenocytes, and ligament cells, but not by undifferentiated mesenchymal cells (3)(4)(5)(6)(7)(8)(9)(10)(11)(33)(34)(35)(36)(37)(38). To delineate cis-elements in the COMP promoter necessary for expression in any of these tissues, we cloned the murine COMP promoter and identified cis-elements necessary for expression in the chondrocytic cell line Swarm rat chondrosarcoma (RCS) (35). We have shown that COMP mRNA and protein are expressed in RCS cells, but not in NIH3T3 fibroblasts. A COMP promoter fragment containing ϳ1.9 kb of 5Ј-flanking sequence is specifically active in RCS cells. In cell culture experiments, deletion analysis of the