Bovine joint capsule was maintained in explant culture in the presence of bovine aggrecan monomer and it was shown that the aggrecan monomer was degraded. Amino-terminal sequence analysis of the resulting aggrecan core protein fragments revealed that the core protein was cleaved at five specific sites attributed to glutamyl endopeptidases referred to as aggrecanase activity. Fibroblast cultures were established from explant cultures of joint capsule and when these cells were exposed to aggrecan, cleavage of the core protein of aggrecan at the aggrecanase sites was observed. Inclusion of either retinoic acid or interleukin-1alpha in medium of either joint capsule explant cultures or fibroblast cultures did not increase the rate of cleavage of exogenous aggrecan present in the culture medium. When aggrecan monomer was incubated with conditioned medium from explant cultures of joint capsule maintained in medium, degradation could be detected after 10 min. After a 6-h incubation period the same fragments of aggrecan core protein were observed as those for tissue or cells incubated directly with aggrecan monomer. RT-PCR analysis of mRNA extracted from joint capsule fibroblasts showed that these cells express both aggrecanase-1 and -2 [ADAMTS-2 (Tang) and ADAMTS-5].