The differentiated phenotype of rabbit articular chondrocytes consists primarily of type II collagen and cartilage-specific proteoglycan. During serial monolayer culture this phenotype is lost and replaced by a complex collagen phenotype consisting predominately of type I collagen and a low level of proteoglycan synthesis. Such dedifferentiated chondrocytes reexpress the differentiated phenotype during suspension culture in firm gels of 0.5% low T_m agarose. Approximately 80% of the cells survive this transition from the flattened morphology of anchorage-dependent culture to the spherical morphology of anchorage-independent culture and then deposit characteristic proteoglycan matrix domains. The rates of proteoglycan and collagen synthesis return to those of primary chondrocytes. Using SDS-polyacrylamide gel electrophoresis of intact collagen chains and two-dimensional cyanogen bromide peptide mapping, we demonstrated a complete return to the differentiated collagen phenotype. These results emphasize the primary role of cell shape in the modulation of the chondrocyte phenotype and demonstrate a reversible system for the study of gene expression.