AMDM, a form of osteochondrodysplasia, is due to the loss-of-function mutations in NPR-B gene. This study investigated the functional involvement of CNP-3, chick homolog of human CNP, and its receptor NPR-B in chondrogenesis utilizing the micromass culture of the chick limb mesenchymal cells. Results revealed CNP-3 and NPR-B expression in the chick limb bud making stage-specific peak levels first at Hamburger-Hamilton stage 23-24, and second at stage 30-31, corresponding to pre-chondrogenic mesenchymal condensation and initiation of chondrogenic maturation-hypertrophy in vivo, respectively. CNP-3 and NPR-B expression in vitro increased parallel to collagen type X expression, but not to that of collagen type II. Treatment of cultures with CNP significantly increased N-cadherin, and collagen type X expression, glycosaminoglycan synthesis and chondrogenesis. Collagen type II expression was not significantly affected. Thus, results implicated CNP-3/NPR-B signaling in pre-chondrogenic mesenchymal condensation, glycosaminoglycan synthesis and late: differentiation of chondrocytes in the process of endochondral ossification.