Since IGF-I is an important chondrocyte growth factor, we sought to examine the intracellular mechanisms by which it exerts two of its pivotal effects, stimulation of proliferation and differentiation. We used the mesenchymal chondrogenic cell line RCJ3.1C5.18, which progresses spontaneously to differentiated growth plate chondrocytes. This differentiation process could be enhanced by exogenous IGF-I. Pharmacological inhibition of the phosphatidylinositol-3 (PI-3) kinase by LY294002, mitogen-activated protein kinase/extracellular signal-regulated kinase (MAPK/ERK)1/2 by U0126, the protein kinase (PK) A pathway by H-89 or KT5720, and the PKC pathway by bisindolylmaleimide suppressed IGF-I-stimulated cell proliferation. In contrast, IGF-I-enhanced early cell differentiation, as assessed by collagen type II and aggrecan gene expression, was not affected by MAPK/ERK1/2 pathway inhibition, but significantly diminished by inhibition of the PI-3 kinase, the PKC and the PKA pathway. Moreover, terminal differentiation of chondrocytes in response to IGF-I, as assessed by gene expression of alkaline phosphatase, Indian hedgehog, and collagen type X, were only interrupted by PI-3 kinase pathway inhibition. In conclusion, IGF-I exerts its differential effect on chondrocyte proliferation vs differentiation through the use of at least four partially interacting intracellular signaling pathways, whose activity is temporarily regulated. When chondrocytes progress from proliferating cells to early and terminal differentiating cells, they progressively inactivate IGF-I-related intracellular signaling pathways. This mechanism might be essential for the complex and cell stage-specific anabolic action of IGF-I in the growth plate.