We have analyzed the effects of transformation by Rous sarcoma virus on expression of types I and II collagen and fibronectin genes in vertebral chondrocytes and compared them with expression of these genes in skin fibroblasts. Transformed chondrocytes display a dramatically decreased amount of type II collagen RNA, which can account fully for the decreased synthetic rate of this protein. Paradoxically, these cells also display greatly increased amounts of type I collagen RNAs, which are translated efficientlv in vitro, but not in the intact cells. We show here that the type I collagen RNAs in transformed chondrocytes are nearly indistinguishable from those found in skin fibroblasts, and that they clearly differ from the type I collagen RNAs found in normal chondrocytes. Transformed chondrocytes also display an increased amount of fibronectin RNA, which can account fully for the increased synthetic rate of this protein. Thus, the effects of transformation by Rous sarcoma virus on type I collagen and fibronectin RNAs in chondrocytes are the opposite of those observed in fibroblasts, which display decreased amounts of these three RNAs. These data indicate that the effects of transformation on the genes encoding type I collagen and fibronectin must be modulated by host cell-specific factors. They also imply that the types I and II collagen genes may be regulated by different mechanisms, the type I genes being controlled at both transcriptional and posttranscriptional levels, and the type II gene being controlled primarily at the transcriptional level.Transformation of differentiated cells by tumor viruses has provided a useful tool for analyzing the mechanisms of cellular gene expression. This has been particularly true for the genes encoding extracellular matrix proteins, whose expression is decreased by transformation with certain viruses. For example, transformation of chicken embryo fibroblasts by Rous sarcoma virus (RSV) results in reduced synthesis of type I collagen (10,20,25,(45)(46)(47) and, in some cases, fibronectin (36,39). Similarly, transformation of chicken vertebral chondrocytes by RSV results in decreased synthesis of type II collagen and the major cartilage proteoglycan (2,18,37,38). The reduced rates of synthesis of type I collagen and fibronectin in transformed fibroblasts reflect decreased amounts of the corresponding RNAs (1, 3. 15,19,43,45,46,51) These data demonstrate that transformation by RSV has opposite effects on the expression of type I collagen and fibronectin genes in chondrocytes and fibroblasts and imply that the action of src is modulated by host cell factors that differ between these cell types. They also imply that the types I and II collagen genes may be regulated by different mechanisms. The genes encoding type I collagen, a protein which is synthesized by many cell types, appear to be regulated at both transcriptional and posttranscriptional levels. In contrast, the type II collagen gene, which is expressed only by a very limited number of terminally differentiated cell type...