The production of immunologically and biologically active somatomedin activity from isolated myoblasts and fibroblasts from fetal rats of 21 days gestational age was investigated. Myoblast-rich cell populations were derived from primary cultures of dispersed muscle cells by the tendency of myoblasts to become detached from the culture dish in the presence of cytochalasin B. Fibroblasts were obtained from fetal muscle. Culture medium conditioned by exposure to myoblasts for 48 hours produced an increased incorporation of both [35S]sulphate and [3H]thymidine by explants of fetal rat costal cartilage in vitro compared to fresh medium. Myoblast-conditioned medium also contained somatomedin-C-like immunoreactivity which diluted in parallel with partially purified human somatomedin-C (3,271 +/- 446 mU/mg cell protein; mean +/- SEM, seven experiments). Medium conditioned by exposure to fetal rat fibroblasts did not promote isotope uptake by fetal rat cartilage above control values, and contained only low levels of somatomedin-C-like immunoreactivity (343 +/- 89 mU/mg cell protein, three experiments). The release of both somatomedin bioactivity and immunoreactivity into conditioned medium was significantly reduced by the incubation of myoblasts in the presence of rat growth hormone (100 ng/ml and 500 ng/ml). We conclude that fetal rat myoblasts released growth factor activity during culture which exhibited biological and immunologic characteristics of somatomedin. Since the bioactivity was demonstrated on skeletal tissues from rat fetuses of the same gestational age as those that yielded myoblasts such growth factor release may be physiological.