Proteoglycan biosynthesis by cultured chondrocytes was shown to be depressed by extracellular concentrations of proteoglycan and partially degraded proteoglycan. This reduction in proteoglycan synthesis was reversible on removal of the added proteoglycan. Benzyl-beta-D-xyloside, an exogenous acceptor of glycosaminoglycan synthesis, was used and it was shown that proteoglycan was inhibiting glycosaminoglycan synthesis. Proteoglycan had no effect on the overall protein synthesis by the cultured cells. It was concluded that the exogenous proteoglycan was inhibiting proteoglycan synthesis at the level of initiation or elongation of the glycosaminoglycan chains.