Using a quantitative in vitro model of spontaneous endothelial sprout formation, we have attempted to define physiological inhibitors of angiogenesis from hyaline cartilage, a tissue whose antiangiogenic properties have been well described. The model consists of embedding bovine microvascular endothelial cell aggregates into fibrin or collagen gels, which results in the formation of radially growing sprouts. When chondrocytes derived from the permanent cartilagenous region of the chick embryo sternum are cocultured with the endothelial cell aggregates, sprout formation is markedly inhibited. Addition of anti-TGF-beta antibodies to the cocultures significantly reduced the inhibitory effect of chondrocytes on sprout formation. Chondrocyte-conditioned medium or exogenously added TGF-beta 1 have a similar albeit transient inhibitory effect. Depletion of TGF-beta from chondrocyte conditioned medium with anti-TGF-beta antibodies and solid-phase protein-A significantly decreases the inhibition of sprout formation. These results demonstrate that a chondrocyte-derived TGF-beta-like molecule inhibits capillary sprout formation in vitro and suggest that the antiangiogenic properties of cartilage may at least in part, be mediated by TGF-beta.