Several lines of evidence indicate that annexin A5, a membrane-associated protein with calcium-channel activity, plays a key role in cartilage calcification during endochondral ossification. As a major constituent of cartilage matrix vesicles, which are released from microvilli of hypertrophic chondrocytes, it is involved in calcium uptake necessary for the initial stages of cartilage calcification. Little is known, however, concerning transcriptional regulation of the annexin A5 gene during chondrocyte differentiation. Here, we report on changes in annexin A5 expression by measuring mRNA and protein levels during in vitro differentiation of chick sternal chondrocytes to the hypertrophic phenotype. Terminal differentiation of mature sternal chondrocytes was achieved in the presence of sodium ascorbate in high-density cultures growing either in monolayer or over agarose as cell aggregates. Differentiation of chondrocytes to hypertrophic cells was followed by morphological analysis and by the onset of type X collagen expression. High expression levels of annexin A5 mRNA were detected in chondrocytes freshly isolated from the sterna by enzymatic digestion and subsequently in cells growing in monolayer, but annexin A5 gene transcription was rapidly downregulated when cells were grown in suspension as aggregates over agarose. However, protein levels did not decrease probably due to its low turnover rate. In suspension culture, annexin A5 mRNA reappeared after 3 weeks concomitantly with segregation of the aggregates into single cells and onset of chondrocyte hypertrophy. The downregulation of annexin A5 expression in cells growing as matrix-rich aggregates was reverted when extracellular matrix components were removed and cells were reseeded onto tissue culture plastic, suggesting that cell spreading, formation of focal contacts and stress fibers stimulated annexin A5 expression in proliferating as well as in hypertrophic chondrocytes.