It is well established that mechanical loading is important to homeostasis of cartilage tissue, and growing evidence suggests that it influences cartilage differentiation as well. Whereas the effect of mechanical forces on chondrocyte biosynthesis and gene expression has been vigorously investigated, the effect of the mechanical environment on chondrocyte differentiation has received little attention. The long-term objective of this research is to investigate the regulatory role of mechanical loading in cell differentiation. The goal of this study was to determine if mechanical compression could modulate chondrocyte differentiation in vitro. Stage 23/24 chick limb-bud cells, embedded in agarose gel, were subjected to either static (constant 4.5-k Pa stress) or cyclic (9.0-kPa peak stress at 0.33 Hz) loading in unconfined compression during the initial phase of commitment to a phenotypic lineage. Compared with nonloaded controls, cyclic compressive loading roughly doubled the number of cartilage nodules and the amount of sulfate incorporation on day 8, whereas static compression had little effect on these two measures. Neither compression protocol significantly affected overall cell viability or the proliferation of cells within nodules. Since limb-bud mesenchymal cells were seeded directly into agarose, an assessment of cartilage nodules in the agarose reflects the proportion of the original cells that had given rise to chondrocytes. Thus, the results indicate that about twice as many mesenchymal cells were induced to enter the chondrogenic pathway by cyclic mechanical compression. The coincidence of the increase in sulfate incorporation and nodule density indicates that the primary effect of mechanical compression on mesenchymal cells was on cellular differentiation and not on their subsequent metabolism. Further studies are needed to identify the primary chondrogenic signal associated with cyclic compressive loading and to determine the mechanism by which it influences commitment to or progression through the chondrogenic lineage, or both.