In mammals, the midportion of the soft tissue of Meckel's cartilage at the degenerating stage forms a ligament known as the sphenomandibular ligament. To clarify the mechanism of formation of this ligament by Meckel's cartilage in mouse, we examined the effects of epidermal growth factor (EGF) on the chondrocytes in terms of the proliferation and differentiation of cells and calcification of the matrix in vivo and in vitro. The effects of EGF were examined by immunohistochemical staining, with EGF-soaked beads, by electron microscopy, and by general histochemical analysis of proteoglycans and calcification. Analysis of labeling with bromodeoxyuridine (BrdU) and the rate of cell growth revealed that EGF enhanced DNA synthesis and the proliferation of Meckel's chondrocytes. Histological findings in organ culture and in cell culture, with and without the application of EGF-soaked beads, revealed that EGF inhibited the differentiation of cells to chondrocytes and induced phenotypic changes in fibroblastic cells. The inhibition of alkaline phosphatase activity that resulted from exposure to EGF was accompanied by prolonged calcification of the matrix. Whole-mount staining revealed that subcutaneous injection of EGF enhanced the disappearance of Meckel's cartilage. Our results suggest a possible mechanism whereby the midportion of Meckel's cartilage remains uncalcified and is rapidly transformed into the sphenomandibular ligament.