We examined the effects of cyclic AMP on terminal differentiation and calcification in rabbit growth plate chondrocyte cultures. Dibutyryl cAMP (dbcAMP), as well as 8-bromo-cAMP abolished the increases in chondrocyte size, alkaline phosphatase activity, type X collagen synthesis, 1 alpha, 25-dihydroxyvitamin D3 receptor synthesis, the incorporation of 45Ca into insoluble material, and the calcium content. All of these occurred in parallel untreated cultures during the hypertrophic (terminal) stage. The inhibition of alkaline phosphatase by dbcAMP was detectable after 24 h, and this effect was reversible. dbcAMP and 8-bromo-cyclic AMP inhibited alkaline phosphatase induction and calcification at low concentrations (3-5 microM), whereas 10-30-fold higher concentrations were required to stimulate proteoglycan synthesis. These findings suggest that cAMP plays a crucial role in suppressing terminal differentiation of chondrocyte and cartilage-matrix calcification.