Immunosuppressants are now known to modulate bone metabolism, including bone formation and resorption. Because cartilage, formed by differentiated chondrocytes, serves as a template for endochondral bone formation, we examined the effects of the immunosuppressant rapamycin on the chondrogenesis of mesenchymal cells and on the cell signaling that is required for chondrogenesis, such as protein kinase C, extracellular signal-regulated kinase-1 (ERK-1), and p38 mitogen-activated protein (MAP) kinase pathways. Rapamycin inhibited the expression of type II collagen and the accumulation of sulfate glycosaminoglycan, indicating inhibition of the chondrogenesis of mesenchymal cells. Rapamycin treatment did not affect precartilage condensation, but it prevented cartilage nodule formation. Exposure of chondrifying mesenchymal cells to rapamycin blocked activation of the protein kinase C alpha and p38 MAP kinase, but had no discernible effect on ERK-1 signaling. Selective inhibition of PKCalpha or p38 MAP kinase activity, which is dramatically increased during chondrogenesis, with specific inhibitors in the absence of rapamycin blocked the chondrogenic differentiation of mesenchymal cells. Taken together, our data indicate that the immunosuppressant rapamycin inhibits the chondrogenesis of mesenchymal cells at the post-precartilage condensation stage by modulating signaling pathways including those of PKCalpha and p38 MAP kinase.