Degradation of the cartilage proteoglycan aggrecan is one of the earliest events that occurs in association with osteoarthritis. Little is known concerning the fate of the residual N-terminal G1 domains of cleaved aggrecan; domains that remain bound to hyaluronan. In this study, 68-72-kDa bands representative of aggrecan G1 domains containing ITEGE(373) neoepitope were detected within a hyaluronidase-sensitive pool at the cell surface of bovine articular chondrocytes and within a hyaluronidase-insensitive, intracellular pool. To determine the mechanisms that contribute to this distribution, CD44 expression was knocked down by siRNA or function by CD44-DN. Both approaches prevented the retention and internalization of G1-ITEGE. Inhibition of CD44 transit into lipid rafts blocked the endocytosis of G1-ITEGE but not the retention at the cell surface. Chondrocytes derived from CD44 null mice also exhibited limited potential for retention and internalization of G1-VTEGE. The consequence of a lack of chondrocyte-mediated endocytosis of these domains in cartilage of the CD44 null mice was the accumulation of the degradation fragments within the tissue. Additionally, chondrocytes or fibroblasts derived from CD44 null mice exhibited little capacity for retention and internalization of exogenous G1-ITEGE derived from bovine cartilage explants. Bovine or wild type mouse fibroblasts were able to bind and internalize bovine-derived G1-ITEGE. Although several pathways are available for the clearance of these domains, CD44-mediated cellular internalization is the most prominent.