Bone morphogenetic protein 4 (BMP4) induces, whereas epidermal growth factor (EGF) inhibits chondrogenesis. We hypothesize that BMP4 and EGF mediated intracellular signals are both coupled in the regulation of Meckel's cartilage development. Two chondrogenic experimental model systems were employed to test the hypothesis: (1) an ex vivo, serum-free, organ culture system for mouse embryonic mandibular processes, and (2) a micromass culture system for chicken embryonic mandibular processes. Chondrogenesis was assayed by alcian blue staining and expression of Sox9 and type II collagen. Exogenous EGF inhibited and BMP4 induced ectopic cartilage in a dose-dependent manner. When BMP4- and EGF-soaked beads were implanted in juxtaposition within embryonic day 10 mouse mandibular processes, the incidence and amount of ectopic cartilage, and Sox9 and type II collagen expression induced by BMP4, were significantly reduced as the concentration of EGF was increased. Similarly, in chicken serum-free micromass cultures, expression of a constitutively active BMP receptor type IB by replication competent avian retrovirus system promoted the rate and extent of chondrogenesis; however, exogenous EGF attenuated this effect. In micromass cultures, BMP signaling resulted in nuclear translocation and accumulation of the signaling molecule Smad1, whereas the addition of EGF inhibited this event. Our results suggest that BMP4 and EGF function antagonistically, yet are coupled in the regulation of initial chondrogenesis. Smad1 serves as a point of convergence for the integration of two different growth factor signaling pathways during chondrogenesis.